NORTH CAROLINA — Throughout last week a red banner at the top of the NC Department of Commerce website said the state was still “awaiting guidance for issuing [unemployment] payments” as hundreds of thousands of North Carolinians began filing claims in the wake of the novel coronavirus pandemic, jamming internet servers and telephone help lines.
Between March 16 and April 8, nearly 500,000 North Carolinians filed unemployment insurance claims — more than 433,000 related to the economic fallout from the pandemic, including independent workers and employees laid off due to the state’s closure of bars, restaurant dining areas, and other ‘non-essential’ businesses. Those affected by the virus made up 87 percent of the total figure of claims in this period, according to the department’s Division of Employment Security (DES).
READ PART I: A guide to unemployment filing as hundreds of thousands wait for benefits [Free read]
The numbers each day were staggering: an additional 21,202 claims on Monday, 29,370 claims on Tuesday, and 22,766 claims on Wednesday. Prior to March 16, the DES received approximately 3,000 claims a week.
The unprecedented surge hit the state in only three weeks, overwhelming the website and phone system at the DES, according to N.C. Senator Harper Peterson, who represents the 9th District covering New Hanover County. Meanwhile, the DES was still waiting for guidance from the U.S. Department of Labor on how to begin distributing its portion of a $2 trillion economic stimulus package — the largest in the nation’s history — to those who are now unemployed or who have reduced hours because of the pandemic.
“The state is just waiting for those guidelines,” Peterson said last week. “That’s the holdup; the money’s there. We know they’re going to add $600 a week on top of state benefits. But we’ve got to know — there’s confusion — trying to get through online or by calling is just a mess.”
The stimulus package, signed into law as the CARES Act on March 27, set aside $260 billion for states to distribute via $600 weekly checks to individuals affected by the health crisis, on top of unemployment benefits already provided by each state.
It also included a provision for $600 weekly payments to independent contractors, self-employed workers, part-time employees lacking sufficient work history or wages — each category of workers otherwise not entitled to unemployment compensation — and those who had already reached the maximum number of weeks allowed by each state’s unemployment program.
On Friday, the DES announced it would double its current staff of 50 to handle “the extraordinary surge in demand,” transfer 100 employees from another division, and hire a 200-person private call center. Additionally, it planned to install new computer servers to free up its overwhelmed online filing system, speed up mail delivery of documents, and purchase 500 new computers to handle the onslaught of claims.
“I mean, they know that it’s a disaster … And they’re challenged by simply the physical distancing [requirements]. And they’re trying to tie in people working from home, so that’s a challenge in itself,” Peterson said.
But for unemployed workers across the state, many questions remained unanswered by the end of last week. The following Monday, Peterson said he had been receiving most calls from independent contractors and self-employed workers asking how soon they can apply for benefits, and, from others who had exhausted North Carolina’s 12-week limit of unemployment payments, whether they would qualify.
“It’s simply the DES system catching up with their messaging to match the fed relief package (which hasn’t been given guidance),” Peterson texted. “It’s frustrating beyond belief … There must be a lot of smoke rising out of Raleigh right now.”
Although state benefits and the federal $600 payments will be made retroactively — from the first day of eligible unemployment beginning March 30 — Peterson said the most concerning question has come from constituents who “can’t get to that pie” because they fail to submit their applications due to downed servers and unanswered phone calls.
“And when you do, too often, they’ll get a response back that they’re not eligible,” Peterson said.
Moments later he received word from DES Assistant Secretary Lockhart Taylor that the state had finally received the federal guidelines. (See the state’s interpretation of those guidelines below and at the bottom of this article.)
On Tuesday, Taylor told state legislators that he couldn’t promise a specific date for approval of independent workers applying for the bailout’s Pandemic Unemployment Assistance (PUA) program, but would “like it up and running in two weeks,” according to News and Observer. The U.S. Department of Labor published an extensive set of rules for the program on Sunday — eight days after the bill was signed into law — and Taylor said his employees used the following Monday to try to understand its requirements.
By Tuesday, the red banner at the top of the department’s website no longer said it was “awaiting guidance,” but reminded each applicant that once a claim is filed, the last employer listed has 10 days to respond to the DES.
“Your claim may be ‘pending,’ and no payment will be released during the 10 days. If there are no issues, it will take about 14 days from the time you file to receive payment,” the notification stated.
By late Tuesday afternoon, Peterson texted a series of charts and slides from the N.C. House Select Committee on Covid-19 — the state’s simplified interpretation of the rules and provisions for the bailout’s three unemployment assistance programs.
“[We’re now] up to 400,000 Covid-19-related applications,” he said, an increase of about 12,000 from Monday night.
By Tuesday, officials at the DES had issued approximately 110,000 payments for Covid-19 claims, totaling $28.6 million, according to a DES spokesman. (He noted that the number of payments does not equal the total number of people who have received benefits, as some have received multiple weekly payments.)
That was up from a total of $10 million reported on Friday, after which the DES promised the number “will grow exponentially in the coming days.”
Who gets paid, and how much?
The federal aid package includes three programs, each designed for workers who do not have the option to telework or take paid leave: the PUC (Pandemic Unemployment Compensation), PEUC (Pandemic Emergency Unemployment Compensation), and PUA (Pandemic Unemployment Assistance). Beginning at the PUC, each subsequent program essentially picks up workers not covered by the previous program.
All payments for approved applicants will be made retroactively from the first week of their unemployment beginning on March 30 and, depending on the program, last up to four months.
Most broadly, the PUC provides an additional $600 weekly federal payments to applicants already eligible for state benefits. This lasts for 18 weeks, March 30 to July 31. Unlike the other programs, receiving PUC benefits is not dependent on an applicant’s unemployment being related to Covid-19, according to the House committee.
Peterson said the average unemployed North Carolinian receives $260 a week, which would make the total weekly amount received by the average PUC applicant $860.
Before the federal rules were published, Peterson said many seasonal hospitality employees along the state’s southeastern coastline were wondering if they would receive benefits due to the state’s 12-week cap and payment formula. North Carolina is the “only state in the country that looks at the last two quarters of an applicant’s base period,” according to Peterson.
“I’m talking to people who are seasonal employees; they’ve exhausted their benefits. They worked last summer and then submitted unemployment in September and October when the tourist season was over. And now, under the present system, there’s nothing there in the last two quarters. So they would get nothing.”
Peterson said he is now working with other Democrat legislators to raise this state’s maximum of $350 to $425 to account for seven years of inflation since 2013, when a Republican supermajority reduced the cap from $535. According to the News and Record in Greensboro, the 12-week cap is the lowest number of benefit weeks in the country, shared by Florida.
But the next program in the lineup, the PEUC, is designed to add an additional 13 weeks of state and federal benefits for applicants who have already exhausted their benefit duration. If one was qualified to receive the state maximum of $350 before using the 12 weeks, the additional $600 from the federal government would be added to equal a weekly total of $950.
Once those additional 13 weeks of benefits are exhausted, applicants fall into the last pool of benefits — along with independent workers — the PUA. This program extends the total length of time across all three programs to a cumulative 39 weeks. For example, if someone had exhausted the state’s 12 weeks of benefits, then used the 13 additional weeks provided by the PEUC, he or she would have a remaining balance of 14 weeks. This would last until December 30, as the programs stand now.
On Thursday, the DES said it was “working as quickly as possible to modify its technology systems to make sure people can apply for these benefits and receive timely, accurate payments.”
Payments for PUC applicants will come first.
“DES is currently testing the payment system and anticipates making the first payments [for the PUC] by April 17,” according to the DES.
The online filing system for the PUA program is expected to accept claims by April 25, and as for the PEUC, the state said it will “update the public on when online claims will be accepted.”
On Tuesday afternoon, Chris Vinopal and Ryan Daly were working on a new patio behind Vinopal’s home on 15th street, just north of Dock Street. For two people who are accustomed to the long but fluctuating hours of a film set, free time was abundant.
Last year Vinopal and his wife had moved to Wilmington from Chicago because of the region’s strong film industry. In mid-March, Vinopal had worked four days on the set of the pilot series Lost Boys as a lighting technician when he was told that Warner Bros was shutting down all film sets across the country due to the quickly spreading Covid-19 pandemic.
“And there’s no guarantee of when it’s coming back,” Vinopal said.
A week later he began filling out the unemployment application on the DES website.
“I got halfway through it before it started going haywire,” Vinopal said. “I’d fill out a list of questions, hit ‘next’, and then watch it load and load and load, and eventually it just said, ‘Server lost connection; cannot load page.’”
He continued the process the next week after he gathered the necessary documents, including W-2 forms and scattered paystubs, and the online system had become even worse.
He said it took him more than an hour to add two employers, and an additional five minutes every time he had to validate their addresses, click each command button, or attempt to go to the next page.
“Sometimes it would work, other times I had to wait and wait, and it would tell me the server was disconnected and it can’t load the page. Then I had to log back in but it went back to where I started,” Vinopal said.
He finally finished the application early the next morning, when the servers weren’t handling as much traffic. Five days later, he received a notification that he completed the application and that the weekly state limit was $350, but he wasn’t told how much he would receive or if he had to fulfill the weekly work search certifications. (According to Peterson, those who have registered for unemployment must simply fill out the weekly certificates online and check ‘yes’ to indicate that you have looked for jobs.)
He also said there was no information about whether he was eligible for the additional $600 payments from the federal government as a freelance contractor.
“It feels like there’s this invisible traffic jam of information that people are trying to get out of. And the government is trying to answer, but we can’t get anywhere,” Vinopal said.
“Who’s going to live on $350 a week?” Daly added.
Peterson said he has raised the communication issue with Taylor, the assistant secretary in charge of the DES, especially concerning those who are denied coverage.
“When you finally get through on the phone, or you get a return that your application has been denied, at least give them some understanding that there is federal assistance that’s going to be coming, so don’t lose hope,” Peterson said. “It’s just kind of an in-your-face ‘No you’ve been denied’ with no follow-up directions on what to do. And people need that reassurance. Whether it’s a phone call, a letter or an email, at least give them some sense that you care and there’s a person at the other end who’s going to do something for you.”
Daly was working his second day as a special effects specialist on the set of an HBO comedy series called The Righteous Gemstones in Charleston when he was told the set was shut down. Unlike Vinopal, he was informed by executives that he may be given two weeks of severance pay, but production crews would be on standby for at least two months.
“It took me five days to complete the damn thing,” Daly said of the unemployment application process. “I got nowhere the first day; it just kept repeating, ‘Error, error, error, error.’ I guess I did create a username.”
Below, read the summary of unemployment benefits provided by the CARES Act, as interpreted by the House Select Committee on COVID-19 Economic Support Working Group:
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