Narrative: a. 3.

Maryland Department of Labor Division of Unemployment Insurance State Quality Service Plan  Alternate Fiscal Year 2024

A. Overview

1. State priorities and the strategic direction the state has adopted to ensure continuous improvement.

The Maryland Department of Labor’s Division of Unemployment Insurance (“The Division” or “DUI”) continues to balance several important interests, including but not limited to: ensuring that eligible claimants receive benefits as quickly as possible; protecting the integrity of Maryland’s UI program; providing excellent customer service to claimants, employers, and third parties; and preventing and detecting fraud in the UI system. Over the past federal fiscal year, DUI has continued efforts to ensure continuous improvement. In addition to these core objectives, DUI also actively supports reemployment through services such as the RESEA program.

Modernization Update

On September 21, 2020, the Maryland Department of Labor, DUI launched BEACON 2.0 (“BEACON”), a fully modernized system which integrated benefits, appeals, and contributions functionalities. The launch of BEACON was the result of more than six years of planning, testing, and development and, in the past year, DUI has continued to work with its BEACON vendor to make improvements to the new system. 

Trust Fund Solvency

Maryland DUI’s trust fund is not solvent. The trust fund had a balance of $ $1,871,961,707.23 as of September 30, 2023.

Employers have been taxed under the Table C tax rate schedule for the 2023 calendar year as a result of federal funding allocated to replenish the Maryland Unemployment Insurance Trust Fund. Table C includes rates that range from 1.00% to 10.50%. The rate for new employers in 2023 is 2.30%. The rate for a foreign contractor (new construction employers headquartered in another state) is 5.10%. The standard (employer) rate is 10.50%. Maryland’s taxable wage base for 2023 is $8,500. The same Table C rate application was also applied to employers in the previous calendar year

Remaining dedicated to our goals and mission

DUI remained committed to the following actions to improve the Division’s capacity to administer and operate the UI program effectively: (1) developing and implementing staff training to maximize BEACON’s efficiencies, (2) improving reemployment outcomes among claimants by educating them on and holding them accountable to work search requirements, (3) ensuring equitable access to the State’s UI program, (4) combating fraud to ensure the integrity of the UI program, (5) preventing overpayments and recovering overpayments when required to ensure the Division is acting as a good steward of the trust fund, (6) implementing the permanently authorized RESEA program, (6) reducing the improper payment rate, and (7) continuing to provide excellent customer service to our stakeholders.  

2. Assessment of past performance and expected future performance. Includes, at state discretion, a discussion of external factors that may have performance implications:

a. Assessment of past performance revealed the following primary factors contributingto overall program operations and performance: 

i.          Rebuilding and Improving program performance by addressing the workload created by the COVID-19 pandemic and its impact on the UI system

Continued Efforts to Improve Customer Service

During the COVID-19 pandemic, DUI contracted with a vendor to assist with the dramatic increase in claims filed. This vendor continues to support DUI by answering calls and, between October 1, 2022, and June 30, 2023, helped DUI handle a total of approximately 1,537,056 inbound telephone calls. In addition, DUI’s Virtual Agent (launched May 1, 2020) assisted in answering certain questions from claimants, employers, and others throughout the fiscal year, but which allows staff to answer more complex questions and issues that the Virtual Agent is not able to assist with. Funds granted to DUI as part of the equity grant have been used to create a customer service survey that is gathering feedback from individuals using DUI’s website or BEACON. (See “Ensuring Equitable Access to UI” below for more information regarding the grant.) 

Legislative Updates/Changes

House Bill 253 (Unemployment Insurance - Federal Extended Benefits for Long–Term Unemployment, 2022 Legislative Session): This bill, which passed in the 2022 Legislative Session, amended Md. Labor and Employment Code Ann. § 8-1103, to add a Total Unemployment Rate (TUR) trigger for extended benefits and also provided an extra trigger for EB benefits during a “high unemployment period.” The bill became effective on June 1, 2022. House Bill 4 (Unemployment Insurance – Recovery of Benefits – Refund of Payments, 2022 Legislative Session): This bill, which passed in the 2022 Legislative Session, imposed new requirements on the DUI concerning the investigation of UI claims when DUI recovers UI benefits in excess of the amount included in the overpayment notice provided to a claimant. DUI requested and received a conformity opinion on the bill prior to the bill’s passage. The bill became effective on October 1, 2023.

Senate Bill 136/House Bill 140 (Unemployment Insurance - Recovery of Benefits - Limitation and Methods, 2023 Legislative Session): This bill, which passed and was approved by the Governor in the 2023 Legislative Session, amended Md. Labor and Employment Code Ann. § 8-809 to limit the amount that DUI may offset from UI benefit payments to recover non-fraud overpayments of UI benefits. DUI requested and received a conformity opinion on the bill prior to the bill’s passage. The bill will become effective on April 1, 2024.

Delinquent Employer Contributions

Effective March 1, 2023, the Division established a new policy for handling and collecting delinquent employer contributions. Interests now accrues on delinquent contributions each day past the deadline and additional financial penalties may apply. Employers who do not take action to pay their contributions receive a delinquency notice either 15 or 30 days past the quarterly due date. After 45 days, employers who have not taken action will receive an additional notice. Employers must pay in full or establish a payment plan within 30 days of receiving the delinquency notice to avoid collection activities. Depending on the amount owed, collection tools may include a lien, flagging an employer’s license, garnishment, and/or revoking an employer’s charter.  

 ii.        Changes in State Leadership/Staffing Challenges

Staffing of critical functions continued to be a challenge for DUI in the past year. In response to the departure of key subject matter experts from the workforce and the transition of employees to new employment opportunities within or outside the agency, DUI is continuing to recruit and hire top talent to fill open positions, to allow substitution of applicable work experience in lieu of a college degree, and to cross-train staff.

On January 18, 2023, Maryland removed the four-year college degree requirement for certain skilled job positions and a workforce development program to recruit qualified workers who do not hold college degrees. Maryland recognizes that other qualifications can be considered acceptable in lieu of a college degree for open government positions. Other qualifications can include relevant work experience, training, or community college education. These types of qualifications will be given equal weight for many state government positions in IT, administrative work, and customer service. This has allowed state agencies, including the Maryland Department of Labor, to fill government positions left vacant during the pandemic.

iii.        Reduction of Adjudication and Appeals Claims Backlog

The volume of claims received during the pandemic assistance period created a backlog of claims adjudications and appeals. While Maryland has made progress on the backlog, staff continue to work diligently to complete all adjudications and appeals remaining in the backlog. DUI has made process improvements to allow for quicker resolution of claims that are under potential fraud investigation (UPFI) and continues to analyze a variety of metrics in order to reduce backlogs. On the 10th of every month, Maryland provides data to USDOL regarding its adjudication and appeals backlog. 

b. Expected Future Performance: Administrative Performance Improvement Strategies

            i.          BEACON 2.0, In-House Call Center, Grants Awarded, and Staff Training 

BEACON 2.0

Since BEACON was implemented in September 2020, DUI has continued to collaborate with its vendor to improve the functionality of BEACON. DUI staff meet with vendor staff to discuss problem incident reports (PIRs) and the progress on those PIRs on a weekly basis. The PIRs vary in complexity and length of time to complete.

In-House Call Center

DUI has begun planning for and investing in the creation of an in-house call center that will reduce the Division’s reliance on vendors for call answering. While the project moves forward, vendor agents continue to answer incoming calls.

Grants Awarded in September 2023

Maryland was awarded an ARPA UI Integrity Grant on September 13, 2023, and the State’s full project plan is due by November 13, 2023. Maryland is participating in the Tiger Team consultative project offered by USDOL ETA. Maryland was awarded a Tiger Team grant on September 15, 2023, and the State’s full project plan is due by November 14, 2023. Maryland was awarded an Information Technology (IT) Modernization Grant on September 22, 2023, and the State’s full project plan is due by December 21, 2023. 

Staff Training

DUI’s training unit continues to offer training for staff on a variety of topics. Staff can access training videos in the Division’s training department Learning Management System (LMS), also known as Knowtion. Currently, the training department is developing virtual learning classes on the following topics: the importance of maintaining integrity, the soon to be implemented TrueID tool, and accommodations available to UI claimants with disabilities

ii.         Ensuring Equitable Access to UI

DUI has made ensuring equitable access a priority. The Division understands that it is imperative to reduce barriers caused by technology, language, literacy or disability in order to provide unemployment services to eligible claimants who may be a part of underserved/marginalized communities.

Of particular concern to DUI is that modernization efforts do not create barriers to access for individuals with limited knowledge or access to technology. Claimants may file initial claims, complete their weekly certifications, and complete other actions over the phone rather than via BEACON if preferred.

During this past federal fiscal year, DUI continued to collaborate with the DWDAL, Local Areas and MD Labor’s OFP to adhere to the WIOA State Plan and the “Equal Access to Public Services for Individuals with LEP” statute enacted by the Maryland General Assembly.

On June 16, 2022, Maryland’s application for a UI equity grant was approved by USDOL. The application proposed three separate projects: (1) conducting a customer service evaluation of the State’s UI program in order to develop processes to improve customer service and reduce or eliminate administrative barriers to improve access (and updating communications to claimants based on that customer service evaluation); (2) upgrading the functionality and focusing on improving equitable access to UI through Maryland’s BEACON 2.0 system and the BEACON Mobile Unemployment Application (Mobile App) for Claimants (including by providing an application status tracker for claimants); and (3) the translation of mobile application screens, BEACON screens, and communications into Spanish. These projects are focused on improving equitable access to the UI system for two particular groups: (1) LEP infividuals, and (2) individuals with limited or no access to technology. In the past federal fiscal year, DUI has requested a modification to details of and the period of performance for the projects to allow for further flexibility in completing the project goals.

DUI is dedicated to helping individuals with disabilities receive the accommodations needed to access Maryland’s UI system. The Division has been reviewing and improving policies related to the accommodations available to claimants with disabilities and is planning training to ensure that staff are knowledgeable about those available accommodations.

iii.        Combating Fraud

Maryland continues to use several tools that help to ensure the integrity standards of the State’s UI program. For detailed information regarding fraud prevention and detection, see Maryland’s Integrity Action Plan Narrative for Alternate Year State Plan FY2024.

System Enhancements to Combat Fraud

Since the launch of BEACON, DUI has continued to invest in additional tools to prevent and detect fraud. On August 2, 2023, DUI installed a firewall which prevents users with a foreign IP address or those using a virtual private network (VPN) to avoid having their origins detected from accessing BEACON. Throughout the federal fiscal year, DUI continued to prepare for the implementation of a LexisNexis tool, TrueID, which is shortly to be implemented.

Ways for Marylanders to Report Fraud

DUI continues to communicate with and educate stakeholders regarding the various means available to report suspected fraud. Anyone who believes that their information was used to file a fraudulent unemployment insurance claim can report that to DUI by e-mailing ui.fraud@maryland.gov, and claimants requesting more information can be referred to the following website: at https://www.labor.maryland.gov/employment/uistopfraud.shtml.

Marylanders can also report fraud by completing a “ Request for Investigation of Unemployment Insurance Fraud form and returning it to the Division. Suspected unemployment insurance fraud can also be reported to the DOL-OIG Hotline by visiting the website or by calling 1-800-347-3756.

In addition, DUI developed a process to assist individuals who receive a 1099-G tax form but never applied for unemployment insurance benefits. These individuals are asked to complete an Affidavit (“Affidavit for Correction of Form 1099-G”) and submit it along with a picture ID to the Benefit Payment Control Unit. Employers that believe a fraudulent claim was charged to their account can file a benefit charge protest through the BEACON employer portal or by calling the employer call center.

Messaging About Fraud

DUI continues to message internal and external stakeholders about the important role that they play in maintaining the integrity of the UI system. This messaging is delivered through emails, desk guides, BEACON portal messaging, and on the Division’s website. DUI staff are regularly informed about fraud schemes via emails.

The Division has uncovered scams in which fraudsters are impersonating the Division in emails and text messages. In response, the Division continues to educate claimants, employers, and third parties about ways to distinguish between legitimate assistance from Division staff and potential scams and how to report potential scams to the Division.

3. Coordination with Plans, Including WIOA

a. Supporting the Reemployment of UC Claimants through RESEA, Short-Time Compensation   (STC), Robust Work Search Activities, and Other Targeted Initiatives

During the year, DUI continued to work with DWDAL to execute the Workforce Innovation and Opportunity Act (WIOA). Under WIOA, DUI connects UI claimants to a full range of reemployment services offered through DWDAL’s AJCs and their MWE. DUI also continued to collaborate with Maryland’s REASE evaluation team and AJC staff to evaluate and improve the RESEA program in Maryland.

On August 15-16, 2023, both DWDAL and DUI participated in the third annual Maryland Reemployment Summit. The theme of the summit was to foster and promote communication amongst collaborating co-workers in order to successfully implement and carry out the vision of getting Marylanders back to work after separation from employment. Throughout the federal fiscal year, DUI and DWDAL staff met on a monthly basis in order to collaborate on issues of importance to both Divisions.

RESEA/ROW Beginning December 01, 2022, Maryland now requires a secondary RESEA workshop for any individuals who remain unemployed 10 weeks after completing their RESEA workshop.

Maryland’s Work Search Requirement

 To be eligible for UI benefits, claimants must be able to work, available for work, and actively search for work each week. Claimants should upload or create a résumé in MWE, make the résumé viewable to employers in MWE, and maintain an up-to-date résumé in MWE while they are collecting UI benefits. Claimants must complete at least three valid reemployment activities per week, which must include at least one job contact. Claimants should enter their completed reemployment activities in the Job Contact and Reemployment Activity Log in MWE or keep a paper log if they do not have access to a computer. Valid reemployment activities are actions that may reasonably lead to a claimant becoming reemployed, including activities that remove barriers to reemployment.

Short-Time Compensation/Work Sharing Program

Maryland continues to participate in the short-time compensation (STC) benefits program. Maryland has a full-time Work Sharing Program team, which is led by the Manager of the Reemployment and Trade Unit (RTU). RTU trains employees to use BEACON, including how to enter hours into the system at the request of their employer. RTU staff use a dedicated mailbox (only for Work Sharing purposes) to communicate with employers to address questions/concerns and to share information about the status of Work Sharing applications, plans, and issues.

Benefit Accuracy Measurement Unit (BAM) Maryland DUI continues to seek guidance and use technical assistance provided by USDOL’s National and Regional offices. DUI’s BAM staff is working with USDOL to correct the issues regarding the timeliness of case completion for both paid and denied claims to meet federal performance requirements.

Since the implementation of BEACON, the BAM unit has experienced issues relating to universe pulls and the uploading of completed cases. In addition to the technical issues with BEACON, the BAM unit experienced difficulties with the SUN System throughout this federal fiscal year. The BAM unit supervisor continues to work with the BEACON vendor and the SUN System Help Line as issues arise.

Regarding the timeliness performance measures, to ensure cases are signed off to meet the 60-day, 90-day and120-daytimelapse, BAM Investigators are now required to complete cases within the 45-day time frame. The 45-day completion time frame allows time for the BAM supervisor to review cases, return the cases for correction when required, and sign off on those cases within 60 days. The BAM Supervisor will continue to monitor the 60- and 90-day timelapse to ensure cases are submitted to the supervisor and signed off in the SUN System timely

B. Federal Emphasis (GPRA goals)

This chart shows Maryland performance compared to the GPRA goal:

1. GPRA - Percent of Intrastate Payments Made Timely 

DUI fell short of this goal. During this federal fiscal year, issues of backdating, backlogs, and fraud prevention and detection continued to affect the Division’s ability to meet this goal. Maryland will continue to take steps to address this deficiency in the current federal fiscal year.

2. GPRA - Detection of Recoverable Overpayments 

Maryland fell short of this goal. The historic high volume of claims received during the pandemic, as well as the need to get benefits to claimants quickly, led to the creation of considerable overpayments. Since the CARES Act programs have ended in Maryland, the Division is working to resolve any outstanding high dollar overpayments. A goal has been set to meet federal performance goals during the next SQSP narrative biennial submission.

3. GPRA - Percentage of Employer Tax Liability Determinations Made Timely

Maryland fell short of this goal by 6.78%, an improvement from the previous biennial year submission. In 2022, the Division discovered that the email prompt to notify employers to register for their BEACON employer account was not always being sent to newly-registered employers. The email notification has since been tested to make sure that employers are receiving the appropriate notification to register in the BEACON employer portal. BEACON has the functionality to allow employers to register and establish accounts on the same day with limited human intervention. In October 2022, BEACON was updated to enable a weekly crossmatch that identifies employers who have not registered with the Division.

Another tool being used to help employers with account activation is the dedicated employer hotline (launched on August 24, 2020). DUI will continue to take steps to address this deficiency.