Hundreds of thousands of Louisiana workers will continue to receive a $300-a-week boost in unemployment benefits from the feds after a massive COVID relief and spending bill was signed into law by President Joe Biden Thursday.

That will keep benefits flowing to a historic number of laid-off workers in the short term. But the bill could also help the state shore up the ailing fund that pays claims for the longer term.

The American Rescue Plan Act will send a windfall of cash to state and local governments, about $5 billion of it to Louisiana. A portion of that appears likely to be used to replenish the state’s unemployment trust fund and pay back the roughly $140 million borrowed from the feds to pay claims after the fund went bankrupt last year.

“I think a considerable allocation can and should be made to the trust fund and to pay the debt back that was borrowed,” said Commissioner of Administration Jay Dardenne. That sentiment was echoed by business groups, who want to avoid higher taxes being levied on companies who pay into the fund.

In the meantime, thousands of laid-off workers in Louisiana are still trying to navigate red tape at the Louisiana Workforce Commission, which administers benefits. For some, the extended benefits won’t mean much because they can’t get the payments they say they are owed.

In December, after seeing a wave of suspicious claims, the agency implemented several new fraud-prevention measures, some at the direction of the federal government. Those include having claimants submit selfies and pictures of their identification.

Ava Dejoie, secretary of the commission, said people likely won’t have to re-apply for benefits when the extension kicks in, unlike when Congress made previous changes to the federal benefits. The $300 weekly benefits, which come on top of state benefits of up to $247 a week for some workers, were set to expire Sunday. The bill extends them until late September.

Dejoie said her agency is walking a tightrope of paying out claims to people who are owed money, while also not paying fraudulent claims.

Lawmakers reject higher jobless benefits for Louisiana workers as state borrows to keep fund afloat

“We’re making folks jump through more hoops,” she conceded. “I wish the world was just an honest place, but that’s just not the world we live in.”

Those caught up in the dragnet include Emily Underhill, who lost her job working on cruise ships early in the pandemic and started receiving unemployment benefits almost a year ago. A few weeks ago, she got a letter saying she owed the LWC $20,000 because she wasn’t eligible for the benefits she received.

After struggling to get someone on the phone -- wait times have soared at the LWC, according to its data -- she finally figured out she had to send in pictures of her driver’s license and Social Security card as part of new requirements.

She hopes to be back to work this summer, but until then the unemployment benefits are keeping her afloat.

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“It’s keeping the bills paid, food on the table until the economy opens up and I can get back to doing what I was doing,” she said.

From the end of December, when the new security measures were implemented, to early January, average wait times callers faced at the agency’s claims center spiked from 39 minutes to 96 minutes, according to data published by the agency. Wait times have stayed high since, still averaging 89 minutes as of late February.

In a recent legislative hearing, Dejoie said the agency had cleared a backlog of about 30,000 claims that were held up by the new security measures. Still, she said about 20,000 people are currently in some stage of trying to get access to unemployment benefits.

Dejoie said roughly 230,000 people are currently receiving some form of unemployment benefits. Months into the pandemic, that number was over 400,000.

Louisiana unemployment agency pushes back against lawsuit

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Wendy Manard, a New Orleans attorney who has helped laid-off workers navigate the system, said she’s been contacted by hundreds of workers seeking to join her lawsuit against the agency, which aims to get people their benefits.

Manard said many of the overpayment letters were sent mistakenly to workers who she believes are eligible for benefits. And when people appeal the overpayment notice, they have a hard time getting a timely hearing.

“I’m glad to hear the COVID relief bill was passed,” Manard said. “I do have some concerns about how long it’s going to take for people to start receiving their benefits.”

Dejoie acknowledged staffing is a challenge. She said the agency has brought in other state workers to help out, but “you don’t create an experienced unemployment insurance staff person overnight.”

“It’s not just warm bodies that do this,” she said. “It’s professional, experienced staff people. Those are just not out there. They could never have been out there to respond to a global pandemic.”

State unemployment agency processes nearly 140,000 claims for extra $300; others in limbo

The $300 boost from the feds comes on top of the relatively meager benefits Louisiana pays to laid-off workers. In fact, Louisiana also has the lowest average weekly benefit for unemployed workers, according to advocacy groups. A recent report by Step Up Louisiana found recipients were paid an average of between $180 and $210 a week in state benefits since March 2020. The state’s maximum benefit of $247 a week is among the lowest in the U.S. as well.

The report said the agency has done an “impressive job” distributing billions in unemployment benefits, but notes “the strained system has struggled to keep up with the volume of calls.”

“Unemployed people, seeking to resolve their claims, have reported that they wait on hold four hours a day to be able to speak with someone,” the report said. “Many times, workers were only able to reach a recorded message saying that call volume was too high.”

The new law continuing the $300 weekly payments was passed along highly partisan lines. It was opposed by every member of Louisiana’s congressional delegation, which at the moment includes no Democrats.

After months of 'barely surviving,' extra $300 unemployment payments are on track in Louisiana

Congressman Garret Graves of Baton Rouge in an interview blasted the legislation as irresponsible, citing its massive price tag and lack of Republican support. He said he would have been on board for a smaller, more targeted relief bill that continued unemployment benefits and addressed other pressing issues.

“This is real debt you’re incurring for children and grandchildren,” he said. “This isn’t Monopoly money.”

Graves said he also thinks the $5 billion in state and local aid sent to Louisiana was too generous, though he would have supported some level of aid. He added that using some of the money to replenish the unemployment trust fund is likely warranted, given the alternative of “jacking up taxes” on struggling businesses.

The state’s unemployment fund was healthy, at over $1 billion, before the pandemic, but it ran out of money last year, prompting the state to borrow from the feds. If it is below a certain amount by the fall, taxes on businesses will automatically go up and benefits will be cut to recipients. Those tax hikes and benefit cuts were suspended by the Legislature last year.

Fake unemployment claims letters, cash-loaded debit cards show up in some Louisiana mailboxes

Dardenne, who serves as Edwards’ budget chief, said the governor’s team will meet Monday to go over the legislation. At some point, the administration will present a plan for using the windfall to the Legislature, which must sign off on spending plans.

Dejoie said she hopes the administration can reach a deal with the GOP-led Legislature to replenish the trust fund.

“Also looking at an increase in the state maximum weekly benefit should be part of the conversation, depending on what is possible to deposit in the state unemployment trust fund,” she said. “Hopefully that will be something the Legislature takes as a top priority.”

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