Report: How NJ Cleaned Up its Unemployment Mess Since COVID

You know the old saying: Don't judge an unemployment insurance system by the year 2020.

The coronavirus pandemic was a cataclysm for New Jersey's system that processes claims from individuals out of work, but it was also a mess throughout much of the nation.

A new report out of the John J. Heldrich Center for Workforce Development at Rutgers University takes a deep dive into New Jersey's attempt to improve the claims process in the years since the system was overrun by requests, when non-essential businesses were forced to close due to COVID-19.

And the report suggests other states could benefit from taking notes on New Jersey's approach toward modernization.

NJ unemployment claims during COVID

During the first week of March 2020, before the pandemic started impacting New Jersey, the state handled a little more than 7,900 new claims. Two weeks later, after the COVID emergency had taken over, initial claims jumped to 155,000. And by the end of the month, the weekly request count neared 214,000.

Immediately, the state Department of Labor was in the hot seat for a system crash, tied-up phone lines, convoluted processes online, and delays in getting payments out to cash-strapped residents. And NJDOL was called out for using a fragile mainframe system operating on a programming language (COBOL) that had been developed in 1959.

"While neither COBOL nor mainframes are inherently unworkable, they are not ideal for operating state UI systems for a multitude of reasons," the report says. "For example, the lack of availability of COBOL programmers when multiple states were having technical challenges during the pandemic was challenging."

At the same time, New Jersey and other states had to set up three entirely new unemployment programs per federal legislation.

"States, including New Jersey, did so in an average of about a month," said report author Michele Evermore.

In late 2023, New Jersey's system is still running on COBOL — migrating away from it would take a while — but the entire process has improved for users, thanks to a modernization effort that involved everyone from frontline staff to high-level staff, the report says.

Is NJ's unemployment insurance process any better today?

"There is not a state in the nation that paid benefits on time in 2020," Evermore said. "Everybody experienced a lot of delays, a lot of crashes."

To better understand the effort to improve New Jersey's unemployment insurance program, Evermore interviewed key workers at NJDOL and the New Jersey Office of Innovation in 2023.

A major piece of the modernization was gathering feedback from UI claimants themselves, the report noted. Also key was a comprehensive process that mapped out hurdles in the system — rather than prioritize one shortcoming, identify as many pieces of the puzzle as possible that need work.

And in late 2021, New Jersey was chosen as a pilot state for improvement of the federal unemployment insurance system.

According to the report, the average unemployment benefits applicant in New Jersey is now able to complete the intake form 48 minutes faster than the previous version of the form. And users can now access the forms they need on a mobile device.

"The lessons learned from New Jersey's approach to improving the administration of unemployment compensation can be beneficial to other states," Evermore said. “States that have already modernized their approach to unemployment compensation as well as states in the process of modernization should consider many aspects of the way New Jersey has been making improvements.”

Still, New Jersey "isn't all the way there," Evermore said. But the state is using the correct process.