May 08 2020

How the Cloud Can Help States Process Unemployment Claims Faster

States find it efficient to shift unemployment insurance systems to the cloud.

The pace of new unemployment claims has been staggering. On May 7, the federal government reported that another 3.2 million people filed first-time unemployment claims in the previous week, bringing the total to more than 33 million in just seven weeks. The official unemployment rate now stands at 14.7 percent, a figure unseen since the Great Depression, and the Labor Department reported that 20.5 million jobs were lost in April. 

Those filings have put unprecedented strain on state unemployment systems, leading to crashed websites and delayed aid to residents who have been put out of work due to the coronavirus pandemic. According to an April report from the Information Technology and Innovation Foundation, at least 26 state unemployment insurance websites had crashed recently. 

However, there is a bright spot for states look to and learn from: Cloud computing solutions have helped state unemployment insurance systems process claims faster. Cloud-based Infrastructure as a Service helps increase websites’ capacity and prevent them from crashing. 

How Cloud Streamlines States’ Unemployment Claims

Various states have been modernizing their unemployment systems. Mohammed Jalaluddin, CIO of the Mississippi Department of Employment Security, tells Government Technology that past disasters such as Hurricane Katrina pushed the state to upgrade its legacy system. The state started doing that in 2009 and then began hosting an unemployment insurance system in the cloud as part of a four-state consortium in 2017.

Larry Parker, a government and public relations officer for the North Carolina Division of Employment Security, tells Government Technology that a cloud application has allowed the state to upgrade its unemployment system faster than in the past.

North Carolina was able to program its system for changes to unemployment insurance related to coronavirus legislation “very quickly,” he says. The state has still had to scale up its server capacity more than once, he adds. 

Jalaluddin says cloud “definitely” is critical to helping states better process unemployment insurance claims, as it adds scalability and reliability. 

“Contrary to popular belief, cloud systems are more secure than traditional systems,” he says. 

Meanwhile, in New York, Google has created an application portal to help the state manage unemployment claims. 

A Google spokesperson tells CNBC the company is partnering with several states on “service delivery issues” that it hopes will include unemployment insurance processing.

“We continue to work with local, state, and federal agencies on a number of projects to help them better serve citizens during the COVID-19 pandemic,” a representative from Google’s cloud division said in an email.

The new system went live on April 10. In an April 20 press release, the New York State Department of Labor noted that its application call backlog prior to April 8 had been reduced to 4,305 from 275,000. 

MORE FROM STATETECH: Discover when to ditch a mainframe and when to keep one. 

States Upgrade Legacy Systems and Move to Cloud

Another state that has been shifting its unemployment system to the cloud is Rhode Island. 

Scott Jensen, director of the Rhode Island Department of Labor and Training, tells Government Technology that the state’s UI system, which is based on a 30-year-old COBOL mainframe, would have to be entirely recoded to handle new coronavirus-related unemployment claims, which would have been a “complete disaster.” 

The state decided to duplicate the application on cloud infrastructure, and had people sign up for the new program outside of the state’s main UI system, according to Government Technology. Rhode Island then programmed the application’s back end to verify residents’ information and get the data in a form to be loaded into the mainframe at off-peak times. 

Rhode Island also used the cloud to fix issues with its interactive voice response phone system, Jensen tells Government Technology. That allowed the state to get more information on how many people were calling in to the call center at once. 

Some residents were confused by the new system, but Jensen says that was a small concern when weighed against the larger efficiencies. “The amount of consternation that we caused by having to change so abruptly was more than made up for with people being able to make it through,” he says.

“I think that this strategy of using the cloud is going to be immensely helpful to unemployment insurance programs around the country,” Jensen says. “We kind of missed a generation of technology, and this new generation of cloud-based computing is really, really suited to the kind of work we do. If there’s a bright spot to this pandemic, it’s that necessity is the mother of invention.”

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