PA Department Of Labor & Industry Staff Shortage Compounds Fraud Problems

March 16, 2022

By Anthony Hennen | The Center Square

The PA Department of Labor and Industry building in Harrisburg.
Credit: Jelani Splawn/Spotlight PA

The Pennsylvania Department of Labor and Industry is walking a tightrope: Detecting and preventing fraud in unemployment claims while operating with a staff shortage.

At a Senate Appropriations Committee hearing, Labor and Industry Secretary Jennifer Berrier emphasized that federal funds have helped clear unemployment claims backlogs, but low staff pay has made employee retention difficult.

“The majority of fraud that happened was when the new federal programs rolled out,” Berrier said. “This money that we were pushing out the door as quickly as possible became extremely attractive to fraudsters – domestic and international fraudsters.”

That pattern was repeated nationwide. The U.S. Department of Justice has uncovered $8 billion in coronavirus aid fraud, which could be an underestimate.

“Pennsylvania has definitely been hit with its fair share of fraud,” Berrier said. “I will equate to how we’ve responded to it as playing the hardest game of whack-a-mole that I’ve ever played in my life.”

In response, the department has added more levels of security, such as using ID.me to verify identity and multi-factor authentication, to stop identity theft. The tradeoff has been risking some levels of fraud to send out relief faster to affected Pennsylvanians.

“The main priority was paying off benefits to those entitled to receive them,” Berrier said. “But our next priority was making sure we were addressing the fraud that we saw occurring.”

Sen. Wayne Langerholc, R-Clearfield, asked Berrier to rate the department’s handling of unemployment compensation claims and its handling of fraud; she rated the department a 6 or 7, saying they had not been perfect, and for dealing with fraud, she gave it a 5.

Berrier was mainly concerned about staffing shortages. In 2009 during the Great Recession, she noted, the department processed 900,000 unemployment claims. In the last two years, the department processed 6 million claims – with half the staff.

Processing claims and detecting fraud has, as a result, slowed down in recent years and the department struggles to keep up when demand spikes.

“Our main problem I think has been staffing. Recruiting staff and retaining staff at a 50% turnover rate, at the rate we’re bringing on board additional staff – we’re having a really hard time keeping up,” Berrier said.

To attract and keep more workers, the department is in discussion with the Department of Administration about the possibility of reclassifying positions to boost pay levels.

For Berrier, the department’s issues come down to a need for more workers. “People are constantly looking for ways to manipulate our system,” she said.