Unemployment law overhaul stalls SC jobless checks

COLUMBIA, S.C. (AP) - Last year's unemployment benefits overhaul law has caused thousands of people to wait longer to get benefit checks and put South Carolina out of compliance with federal standards.

"We're missing the deadline," said John Finan, director of the South Carolina Department of Employment Workforce.

Nearly a third of South Carolina's checks are received more than three weeks after the filing of the claim, which fails a federal standard for timely payments, U.S. Department of Labor and state records show.

For years, employers had seven days from the time a jobless benefit claim was filed to tell the state the circumstances under which a job was lost. Employers wanted more time, and the law passed in April gives them 12 business days to respond.

"That is giving them more time, but, unfortunately, because of business days, that can sometimes stretch into two or three weeks that the claimant is waiting for a response," said Erica Von Nessen, the agency's deputy director for South Carolina's unemployment program. "And so you are starting to get checks coming out four or five weeks after they filed their initial claim," she added, and that sparks complaints about late checks.

The delays are a big problem for people losing their jobs, said Sue Berkowitz, executive director of the advocacy group South Carolina Appleseed Legal Justice Foundation. "When you're living paycheck to paycheck and there is even a small glitch in your income, it can have a domino effect. It could mean not being able to keep your lights on or not being able to pay your rent or mortgage," Berkowitz said.

"That is why the federal government has a requirement that the benefits are supposed to be paid in a certain amount of time," Berkowitz said.

Federal guidelines say states should pay 87 percent of their claims with 21 days, said George Wentworth, senior staff attorney for the National Employment Law Project in New York. Giving employers "12 business days makes it nearly impossible to meet the standards," Wentworth said.

That's largely because it takes time to mail and process paperwork, Finan said.

"By the time you do all that, the person can't get his payment in time," Finan said.

During the 2009 federal fiscal year, as claims spiked from the recession, South Carolina paid 82 percent of initial jobless claims within 21 days. When the 2010 federal fiscal year ended in September, South Carolina's timeliness rate fell to 65 percent. Neighboring Georgia's rate was 86 percent and North Carolina's 88 percent during the 2010 fiscal year, according to Department of Employment and Workforce data.

U.S. Department of Labor data shows, South Carolina was paying 69.3 percent of its claims within 21 days in September. Only the District of Columbia's 59.9 percent and Louisiana's 67.2 percent were worse. Alaska, on the other hand was paying 98.8 percent of its claims within 21 days, the nation's best on-time rate.

The federal records also show 20,364 initial unemployment claims were filed in South Carolina in September. That means as many as 6,250 people could have had late checks for claims they filed that month alone.

Wentworth notes states have been slipping in meeting the 21-day standard amid budget cuts that brought furloughs and layoffs and affected how fast claims are processed.

South Carolina asked the Department of Labor for its opinion on the new law after it was passed and Von Nessen said the federal agency warned at the time the change would lead to the state falling out of compliance.

Legislators were asked to rush through a change in the law, but the couldn't get it done in time, Von Nessen said.

Wentworth said the state could face sanctions that include the loss of federal funds that pay most of the costs for running the state's unemployment program. But Finan said no sanctions have been discussed so far, although the Department of Labor wants the problem fixed.

"You have to propose a plan to rectify it - which we do - and what we've said is we're asking for some changes," Finan said.

Finan told legislators the law needed to be changed to 10 calendar days.

Senate Labor, Commerce and Industry Chairman Greg Ryberg, an Aiken Republican, said the issue needs to be dealt with quickly. "I don't think if a person is entitled to unemployment that we can afford to let them linger," Ryberg said.

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