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Nearly 13,000 N.C. jobless stuck in backlogged benefits

Nearly 13,000 of North Carolina's jobless are stuck in a severe backlog in the state's unemployment office that's kept some waiting months for decisions on their request for benefits.

State officials say key parts of the system are running two months behind. But the unemployed say the wait is much longer – up to four months overall for some.

The officials say the delays stem from two state recessions that forced hundreds of thousands into unemployment offices. They're working to reduce the backlog, they said, but it's a slow process.

The problems come as North Carolina grapples with the fifth-highest unemployment rate in the country. And with a new unemployment law ending long-term benefits for more than 65,000 unemployed, some are questioning whether North Carolina's wait times will worsen.

People without jobs say months without compensation can be emotionally taxing and financially devastating.

After Levester Flowers lost his job in May at Bank of America in Charlotte, it took eight weeks before he was officially denied his benefits. Now that he's appealing, more delays loom.

He said he's fortunate to have savings and family to rely on. But he's worried that at 64 years old, employers won't hire someone so near retirement.

“For a senior citizen going through this situation, it's even harder,” Flowers said. “You think losing a job is stressful, but this backlog is stressful, too.”

Others, like Tamiara Phronebarger, are even more concerned.

Phronebarger, a single mother from Statesville, said she has been waiting 12 weeks since she filed for unemployment after leaving her job at Bank of America due to medical reasons. She has been denied benefits once, and still has three weeks to go until her appeals hearing.

Handling a mortgage, car payments and grocery bills has become increasingly difficult. And the burden of two college tuition bills has left her reeling.

“It's absolutely devastating,” Phronebarger said. “I'm having to wait presumably 15 or 16 weeks to even find out if I qualify, and in the meantime, I've got people depending on me.

“Apparently someone didn't enlighten the unemployment office that we're in a bad job market.”

Unemployment officials have expressed concern, and have hired extra appeals officials to help sort through the claims.

But even with new hires, the backlogs are so severe that the state no longer meets federal guidelines for how quickly decisions are issued in unemployment cases.

A snowball from the recession

When a North Carolina worker loses his or her job, he or she can file an unemployment insurance claim – but will receive benefits only if the job was lost at no fault of their own, such as via layoffs or military spouse relocations.

The N.C. Department of Commerce lists about 440,000 people as currently unemployed. Nearly 45,000 initial claims for unemployment insurance benefits were filed in June. About 18,500 were granted, or nearly 40 percent.

Unemployment claims received by the Division of Employment Security are evaluated by an administrator who makes the initial ruling. They base decisions on paperwork filed by both the unemployed and the former employer.

The length of time to make first-level decisions varies, said Larry Parker, a spokesman for the N.C. Division of Employment Security. Some situations, like layoffs, can result in immediate decisions. Others can take longer, he said.

The system for initial decisions is backlogged by about 6,900 cases, Parker said, with most people facing “several weeks” of wait time.

But the main problem exists once cases are appealed.

Appeals hearings arise when either party doesn't agree with an initial decision, Parker said, and are conducted as quasi-judicial hearings, with evidence and witnesses. The appeals referees who conduct the cases are required to be licensed attorneys.

The Division of Employment Security is operating two months behind. It is now scheduling appeals that were requested the first week of June, Parker said. More than 6,000 appeals currently sit in backlog.

And state officials have more work than they can handle.

But that problem isn't new. For more than 10 years, officials said, North Carolina's economy has been dictated by two recessions that forced hundreds of thousands into unemployment.

The first recession, in 2001, doubled unemployment claims. They soared from an average of 65,000 per month in 2000 to more than 124,000 in July 2001, in the midst of the recession, according to data from the U.S. Department of Labor.

It took the state years to catch up. When things got better, another recession hit in December 2007. About 56,000 claims were filed that month. One month later, that number nearly doubled, to 98,000.

And the claims grew while the economy worsened, peaking at nearly 160,000 claims in January 2009.

“I don't think people understood how many claims we dealt with in that recession,” Parker said. “Just pure record numbers.”

And with those claims, came appeals – and more delays. In March 2009, at the height of the backlog, the unemployment office received more than 6,000 appeals each month.

These days, the office receives about 3,700 each month, a number that has been trending downward in recent months.

“It's a complete snowball from the recession,” Parker said. “And we've been working hard on cutting it down. It's just been difficult to work through.”

‘Locked at home'

North Carolina's unemployed say the delays are inexcusable.

Phillip Woods, 30, said when he lost his job at Childcare Network in Charlotte in August, he waited nearly eight months to receive benefits. He eventually won his case in April – but not without months of frustration and mounting costs along the way.

Woods suffers from a medical condition that requires lifelong dialysis three days per week – a cost of about $700,000 per year. Though it's covered by insurance, he's burdened with high medication costs. He also had to pay fees for the attorney that fought his case in the appeals process.

“I was lucky I had saved half of each paycheck all my life,” Woods said. “But even with that, it became depressing, it mentally set me back. I was used to going to work and interacting with people.”

After finally getting his appeals hearing scheduled in April, Woods said the appeals referee assigned to his case arrived more than 30 minutes late to the hearing – so late that it was on the brink of being rescheduled again.

“I told them I would not have my case rescheduled again after I had already waited from September to April,” Woods said. “It's disrespectful.”

Flowers also felt frustration. He said communicating with the unemployment office has been difficult, and he would often be left on hold for 30 minutes, sometimes even an hour. When he used the option to be put on a waiting list to receive a call back, he said he'd wait for more than an hour and a half before the phone rang. Sometimes, the call would never come at all.

“You can't do anything else,” Flowers said. “You're locked at home, just waiting for the call.”

Faulting on federal guidelines

Appeals referees say severe backlogs are no indication of how hard Division of Employment employees are working.

There are 42 appeals referees employed throughout the state, and each is taking seven one-hour hearings a day. In normal times, they handled six.

Joseph Pearlman, an appeals referee based in Charlotte, said the schedule is intense and exhausting, and referees are frustrated, too.

He said hearings can be conducted via telephone or in person. There has been a shift away from in-person hearings in recent years, he said, to move cases through the backlog.

But that can make cases difficult for referees, he said.

“There's no difference in the outcome, but it's hard to assess what's happening with barking dogs or crying babies in the background on the phone,” Pearlman said.

Parker said the state brought in 10 temporary appeals referees to help in late 2012.

But despite the extra help, North Carolina still remains below federal guidelines that regulate how quickly rulings are issued after appeals.

The U.S. Department of Labor calls for all states to administer appeals decisions with “the greatest promptness that is administratively feasible.” A state meets requirements if it has issued 60 percent of all first-level benefit appeal decisions within 30 days, and at least 80 percent within 45 days.

But according to data from the U.S. Department of Labor, North Carolina in June fulfilled only 0.7 percent of appeals decisions within 30 days – far below the 60 percent required.

In 45 days, only 1.7 percent of the appeals decisions were fulfilled, despite the 80 percent standard.

The last time North Carolina met compliance was September 2011, according to the data.

A spokesman for the Department of Labor said that when a state can't meet performance levels, the federal department will work directly with state, providing technical assistance.

States must also submit a corrective action plan, the spokesman said.

Effects of a new law

Many unemployment law attorneys are worried that the state's new unemployment law that took affect July 1 will exacerbate backlogs.

The new law made vast changes to the unemployment system. But among the most significant: cutting maximum unemployment benefits by roughly one-third – from $535 to $350 per week – and reducing the maximum weeks of benefits. The changes also ended federal extended unemployment benefits for more than 65,000 of the state's jobless.

Kasey Underwood, an attorney at Legal Services of Southern Piedmont, predicts the backlog will worsen because the law applies a stricter definition of what situations qualify for benefits.

Underwood said under the old law, the jobless could be eligible for benefits for reasons such as loss of employment due to childcare issues. Now, such claimants would no longer qualify.

Underwood said it's likely that more people will be disqualified at the first level – resulting in more appeals, and more backlogs.

But Chuck Monteith, an attorney with Monteith & Rice in Raleigh, said the wait times will likely decline. With the maximum benefits reduced to $350, Monteith said, many of the jobless might not want to deal with long wait times.

“If someone is only going to get $200 per week, they might just forget the appeal because there won't be as much money at stake,” Monteith said.

“But then again, they might. Two hundred dollars a week is a lot when there are mortgages to pay and food to buy for a family.”

McCabe: 704-358-5197; Twitter: mccabe_caitlin
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