Three weeks have passed since federal unemployment benefits ended.
While new federal aid is still expected to start by early February, one of the holdups was revealed Thursday when the Colorado Department of Labor and Employment announced it would start using a new identity verification system called ID.me within 2 weeks.
The technology, now being used by more than a dozen other state employment agencies, would more quickly verify that a person making a jobless claim is who they say they are — and not a thief who purchased identity data on the dark web for a few bucks. It would also resolve “program integrity” issues (ie: fraud holds) for thousands who’ve been in limbo for months hoping for their issues to magically clear.
The state labor department was forced to add stricter identity verification as part of Section 242 of the Continued Assistance Act. And it had to act fast if it wanted to pay users on Pandemic Unemployment Assistance (PUA), a program ripe for fraud. States needed “procedures for identity verification” by Jan. 26, according to U.S. Department of Labor guidance (page 9).
Without better verification, Colorado cannot start paying PUA users the 11 more weeks that are being funded by the federal government.
According to Phil Spesshardt, the state labor department’s benefits services manager, the federal guidance arrived on Jan. 8. That was two days before the long-awaited unemployment computer upgrade was finished (more on that debut below).
As reported, the state is now reprogramming pandemic benefits like PUA into the system and will roll out “in phases.” The state is also sticking to its “later in January, early February” availability of federal funds, including the extra $300 weekly federal Pandemic Unemployment Compensation (FPUC) payment to everyone on unemployment.
“Every time Congress extends a program, as long as I have worked for the UI division, they make changes to it,” Spesshardt said. “It’s not just as simple as throwing money back on some claims. There are other rules that end up applying that then have to be programmed in.”
In a later email, Spesshardt added, “It is currently believed that FPUC and a portion of PEUC/PUA can be released at the same time, which is the time frame we previously have indicated.”
What is ID.me?
Digging deeper into how ID.me will help cut down on unemployment fraud, I reached out to the McClean, Virginia, company founded in 2010. ID.me developed a way to verify people that relies on a person’s device, location, memory and, to an extent, a heartbeat.
In other words, people must use multi-factor authentication involving a phone or computer device, provide a phone number that matches their credit history or can be verified by a mobile provider, and remember their history to answer questions about their credit history. If those aren’t all available, ID.me sets up a live video chat for visual verification of a real person.
“We have a device verification process, which means fraudsters need to actually have possession of someone’s phone to file a claim, and not just their personal data,” Blake Hall, the company’s CEO and founder, said in an email. “We block 20% of fraudulent claims through this device verification alone. Fraudsters are also caught through our selfie-check feature – blocking individuals trying to get through by wearing masks or using computer-generated images.”
Requiring multiple verification methods makes it more difficult for fraudsters — especially those outside of the U.S. — to comply. But Hall said nothing is foolproof.
“It’s safe to say that no tech is 100% accurate,” he said. “Typically, 90% of applicants verify through our automated process in minutes. The remaining 10% verify through ID.me’s video chat capability so individuals can use their government identity documents to prove their identity with an ID.me agent.”
Not all features will be turned on in Colorado. But they’re available. According to the company, its tech is being used by at least 14 states to verify unemployment claims. Its first state employment customer was Florida, which started June 30. Since then, ID.me’s tech has blocked 696,443 fraudulent claims, as of Jan. 12. Add those up and ID.me estimated that the potential loss was at least $7 billion.
California started using ID.me in early October after it stopped taking new claims for two weeks in order to tackle fraud and install the new verification technology. In the first few days, 101,159 people used ID.me. Of those, 64% successfully verified their identities online, with about 6,000 needing the video-chat verification. The remaining 36% started the process but for some reason didn’t finish it. They had a week to finish the process.
Florida Department of Economic Opportunity officials said that ID.me has successfully verified 20,000 accounts. But, added spokesman Trip Farmer, “It is important to note that individuals could be locked out of their account for a variety of reasons, including suspicious activity that would cause a flag for further investigation.”
In other words, there are other reasons claims get held so ID.me may not resolve all accounts on hold. (Once ID.me is available, let me know if you have success or disappointment with the service.)
So what does this all mean?
The promise of the new ID verification system:
- No more faxing in documents!
- Users with accounts flagged for fraud (the 20+ anti-fraud triggers are still in effect) can clear their accounts by using ID.me if it is a suspect identity issue.
- Those with an “integrity” issue will be among the first to get access to ID.me (the labor department will send a link).
- All new unemployment applicants must get verified through ID.me.
- Refuse to use ID.me and don’t get paid.
→ Got mail you shouldn’t have? Those who haven’t been paying attention to the woes in the state unemployment department are certainly listening now. As the state tried to stop fraudulent filings, it wasn’t fast enough to suppress 1099 tax forms from being mailed to victims. If you received one, you can file an “invalid 1099” report HERE. Read about what happened: Victims reported unemployment fraud to the Colorado Department of Labor. The state didn’t stop the claims.
More unemployment updates
Local media had a plethora of stories on unemployment this week, including CPR’s Andrew Kenney, who analyzed unemployment call center wait times and put the average wait time at 40 days. And The Denver Post’s Noelle Phillips wrote about why it took so long for the state to make its $100 million computer upgrade.
- 185,000 people logged in between Sunday and Wednesday.
- 80,000 requested a payment
- $18 million has been paid
- 33,000 calls were made to the call center
- 36,000 got callbacks via virtual assistance
But the new system also flagged 20% of the payment requests as fraud.
I know there are legit folks who were impacted by that. A few on regular unemployment told me they’ve been collecting benefits for months only to get an “integrity” hold this week.
What happened? When the state moved everyone on regular unemployment to the new MyUI+ computer system, the anti-fraud system measures used for the PUA program kicked in.
Unfortunately, this won’t be resolved until those folks use the new ID.me system, which isn’t ready yet. Sigh. But again, these folks will be among the first who will get the link to use it when available.
→ SEB update: Because someone keeps asking, State Extended Benefits haven’t restarted yet and haven’t been programmed into the new computer system. That means no retroactive payments are available just yet to those who were kicked off on Nov. 28. While there is confusion about whether SEB users can return to PEUC for the additional 11 weeks, the state’s response is: “There is no final decision related to the implementation of SEB at this time.”
→ Wrong emails? The private Facebook group with volunteers answering as many questions as possible stumbled on an issue post computer upgrade. Some user emails had changed. Was it due to fraud or just database errors ? The state is “investigating what differences in some email addresses in the prior system versus the new system.”
Hey Denver employers: Get up to $6,000*
*Must provide training
A little-tapped Denver Workforce Services program is hoping to attract employers with $CASH$ (got your attention?) that could come in handy during the COVID recovery. The city’s unnamed program reimburses $6,000 to qualified Denver companies who hire someone new full-time for at least 32 hours a week.
The program requires employers to provide training related to the position — and Workforce Services is happy to help provide some of that. There are other rules, such as wages must match current industry standards, and the company must be current on unemployment insurance payments and retain the new employee for a period after the training. The idea is that there may be candidates who don’t quite have the needed experience or skills.
“Really what it is, is agreeing to take a chance on someone to help them increase their professional development and either help them grow in your company or help them go off into the world with this new skill set,” said Chelsea Rosty, a spokeswoman for Denver Economic Development and Opportunity. “This program was designed pre-pandemic to help upskill workers. And now, in the pandemic, now that unemployment is so high, employers are hopefully going to have jobs as the economy expands.”
→ $808 million (gulp): Colorado now owes the Feds $808 million (as of Jan. 13), which was borrowed to pay people eligible for regular unemployment. The state ran out of money in its Unemployment Insurance Trust Fund in August. For now, the loan remains interest free through mid-March, unless another federal relief bill extends it. The burden to repay the loan and replenish the Trust Fund is on employers, who spent years repaying the $1.1 billion borrowed from the federal government during the Great Recession.
SBA’s Paycheck loan program has begun
The revamped Paycheck Protection Program debuted Monday with minimal fanfare (I guess all the reporters are busy covering unemployment). That’s unlike last spring when small businesses scrambled to apply for loans and got edged out by larger ones.
But the promise is the same: Use the majority of the loan money to pay employees and the loan will be forgiven. As of Jan. 12, more than 1.1 million loans have been forgiven for over $100 billion, according to the U.S. Small Business Administration, which is overseeing the program.
I’ve heard from a handful of small businesses and independent contractors who are looking into the possibility of getting a loan instead of relying on unemployment. It’s possible!
PPPs are open to companies that were in business as of Feb. 15, 2020. Maximum loans are equal to about 10 weeks of payroll. The terms still apply: Use 60% to pay workers and it’ll be forgiven.
Smaller community lenders, like DreamSpring, got a headstart last Monday. Major banks open for PPP business on Tuesday. Brad Woodward, a DreamSpring spokesman, said the nonprofit lender is definitely working with new customers in Colorado. They received 347 applications for Paycheck loans averaging $40,300. “You’re first in line with DreamSpring,” he said.
Apply at your local bank (here’s a list of lenders). For those who don’t have a regular bank or can’t get their attention, here are few of the community lenders:
→ Support for female entrepreneurs: The SBA launched a digital learning platform called Ascent to help women business owners grow and expand. It’s part of a grant-funded effort to launch 20 Women’s Business Centers across America, though none of the new ones, ahem, are in Colorado. The only SBA Women’s Business Center in the state is Mi Casa Resource Center in Denver.
Even as folks still wait to receive the new round of federal unemployment benefits, there’s a new one in the works that President-elect Joe Biden has put his name on. Here’s what I suspect readers really want to know about Biden’s $1.9 trillion plan (via NYTimes, USA Today, CNN)
- An extra $400 a week for anyone receiving unemployment
- Extend PUA and PEUC unemployment programs to Sept. 30
- $1,400 one-time stimulus checks to supplement the $600 that many started receiving in recent weeks
- Allow for 14 weeks of paid sick or family leave. Employers stand to be reimbursed via a refundable tax credit.
- Raise the national minimum wage to $15/hour from its current $7.25
- Provide $25 billion in rental assistance
- Extend the federal eviction moratorium to Sept. 30
→ Need free computer or internet access? Denver Workforce Services’ simply named Laptop and Wifi Hotspot Loaner Program has begun. I wrote about it back on Nov. 28, so as a reminder, the workforce center teamed up with Denver Public Library to add 400 computers and wireless modems to its loan program. You must be a Denver resident and the tech is on loan, like checking out a book. Reserve devices by emailing Workforce.Development@denvergov.org or call 720-913-1529.
→ Tire discounts: In tough times, all consumers probably want to save a little money so I’m sharing this. A handy new resource comes from the Colorado Department of Transportation, which is pushing winter tire safety. It created an interactive map of tire sellers who are providing discounts on tires and services. Businesses can join the list and get free advertising, while consumers save money. >> DETAILS
I know this column is packed with information so thanks for sticking to the end. Hopefully it’s helpful to you, dear reader. Send your questions, stories and tips on jobs, work and other resources to firstname.lastname@example.org. What would also help the column? Share it with those who need it. Have a great week! ~tamara
What’s Working is a Colorado Sun column for readers navigating today’s economy. Read the archive, send a message and don’t miss the next one. Get this free newsletter in your inbox by signing up at coloradosun.com/getww
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Miss a column? Catch up:
- What’s Working: Colorado employers say there’s still a labor shortage even as more jobs are filled
- What’s Working: Colorado’s economy is still growing, but a slow down has added to recession fears
- What’s Working: More home sellers cutting for-sale price in metro Denver, Colorado Springs
- What’s Working: Here’s how the Front Range housing market slowed over a few weeks as interest rates rose
- Colorado unemployment office plans to use biometric ID verification to battle fraud
- Victims reported unemployment fraud to the Colorado Department of Labor. The state didn’t stop the claims.
- Colorado reopens its unemployment system after long-awaited computer upgrade. Nearly 30,000 request payments.
- What’s Working: Colorado unemployment system getting rebuilt, new round of Paycheck Protection loans start Monday