Office of the Commissioner 54 State House Station Augusta, ME 04333 Phone: (207) 621-5095 Fax: (207) 287-5292 To:

Labor, Commerce, Research and Economic Development Committee of the 128th Maine Legislature

From:

Commissioner John Butera

Date:

March 22, 2018

Subject: Misinformation about ReEmployME and Maine Department of Labor ___________________________________________________________ I am writing to set the record straight on the deployment of ReEmployME so the Department of Labor can set to rest allegations made by a few members of the Committee in public and to the media. Maine is among only a few states in the country that have been able to successfully reengineer its unemployment system. Most states have failed. A major goal of the new system was to get benefits into the hands of claimants quicker, because the system is closer to real time. We expected (and ramped up for) challenges with a deployment of this size and magnitude, but were inundated (and overwhelmed) at times during the first few weeks. As we discovered/uncovered issues and defects, we addressed them as quickly as possible. However, especially in the first few weeks of rollout, we could not resolve issues as quickly as we would have liked. This new online system contains millions of lines of code, and many interfacing partners such as banks and other agencies like the Internal Revenue Service, the Social Security Administration and the US Department of Labor. The US Department of Labor has been an ardent sponsor of the ReEmployUSA consortium. Their expertise, support and oversight were critical to Maine achieving its deployment. They monitored system performance and reported that Maine’s level of performance in every area was excellent for the last quarter of 2017, which included the rollout of ReEmployME (see attached).

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We should be working toward the next phase of development, instead, we have diverted a substantial amount of resources and energy refuting unsubstantiated allegations generated by legislators and the media. The processing of claims has stabilized, and metrics are in line with those from a year ago. Most claimants who initially had challenges are now using the system with ease. The ReEmployME Unemployment Benefits System is working. That is why it is all the more disappointing and counter-productive that members of the Committee continue to publicly perpetuate incorrect information. Following are my most pressing concerns: 1. That the Bureau of Unemployment Compensation willfully destroyed documents as part of a cover-up The personal attacks on Director John Feeney are particularly troubling. Feeney is a man of integrity, having served his country and our Department with distinction. There was not inappropriate destruction of documents. The Bureau follows the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) Guide to Protecting the Confidentiality of Personally Identifiable Information (PII) (see attached). Items in question were telephone messages taken by the technical support line staff, which were reviewed and captured in a more secure manner. • Section 4.2 Privacy-Specific Safeguards Privacy-specific safeguards are controls for protecting the confidentiality of PII. These controls provide types of protections not usually needed for other types of data. Privacy-specific safeguards help organizations collect, maintain, use and disseminate data in ways that protect the confidentiality of the data. Section 4.2.1 Minimizing the Use, Collection, and Retention of PII … PII collections should only be made where such collections are essential to meet the authorized business purpose and mission of the organization. … If PII is no longer relevant and necessary, then PII should be properly destroyed. 2. Assertions at Committee, to the press, and at a ‘town hall style’ call-in, that the system is ‘broken’ as well as being out of federal compliance. Specifically: The system is broken: In fact, the old, legacy system was broken! Most systems across the country, like Maine’s, are 40-45 years old. The aging technology was losing technical support. States that don’t move forward immediately with reengineering their systems could very likely find themselves without the ability to pay benefits at some future point. If our system failed, USDOL would not step in and pay benefits, but could actually impose a penalty Federal Unemployment Tax Act (FUTA) rate (as much as 5.4% instead of .06%) on Maine. 2

Since rollout in early December of 2017, the ReEmployME system has paid well over $33.7 million in claims, paid over 103,323 weekly certifications, seen 21,042 people sign up for accounts with more than 90% completing claims on-line successfully. Today, approximately 90-92% of claimants file online through ReEmployME, 3% file through a customer service representative, 5% file through the automated phone system and less than 2% through paper submitted by the employer. And, our customer service representatives have taken (by phone) over 4,500 work searches since deployment.

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No alternate method of filing: There is misinformation out there that one can only file for unemployment online (after repeated clarifications from DOL staff). The Department abides by federal requirements and guidance, and has always offered a telephonic alternative as well as the option of walking in to one of our twelve CareerCenters statewide for assistance. In an effort to provide the best service possible to claimants, we encourage self-service through ReEmployME, and many individuals take advantage of this convenient feature to file claims, do work search, and access various forms. We even have a percentage of individuals using smart phones or tablets to file their weekly certifications. UIPL 2-16. https://workforcesecurity.doleta.gov/dmstree/uipl/uipl2k16/uipl_0216.pdf Filing methods. For persons unable to access or use a web-based system, the state must offer an alternative option for accessing information and benefits, such as by telephone and/or in person.

3. The Roll-out was premature; time constraints ‘artificial’: Many factors contributed to the timing of the roll-out, including: •

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Abundance of testing 4,600 test cases; 2,800 test scenarios; 8 dry runs of data migration; 3 dry runs of the implementation plan. Fragility of old legacy systems In the past 3 ½ years alone, the legacy systems have been down eight times, sometimes for hours and other times for days, making it unavailable to claimants and staff. At times, it wasn’t clear if it would come back on line at all. Historically low unemployment 4% or below for 24+ consecutive months.

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Our placement in line of other consortium members Being a member of the ReEmployUSA (formerly MRM) consortium, the Maine rollout was dependent on activities completed by Mississippi. When the Mississippi benefit and tax deployments were delayed, Maine was unable to meet its planned go-live on 31 October 2017. With unemployment being at all-time lows, the decision was made to begin the deployment transition on 30 November 2017.

4. Technical line shut down: The technical line (207-623-6765) has been active since going live (see screenshot below), but is meant as a temporary means of addressing lower level needs in cyclical times of high volume. It was staffed by ‘temps’ hired in anticipation of rollout needs. These non-merit staff could only provide limited support; they could not make decisions in the unemployment process, by federal law (UIPL 1201). •

UIPL 12-01 https://wdr.doleta.gov/directives/attach/UIPL12-01.cfm

These OMB issuances distinguish between "inherently governmental functions," which must be carried out by merit-staffed governmental employees and may not be outsourced, and "commercial activities," which may be outsourced. OPM directs Federal grantor agencies to use these two categories as a tool for determining whether a grant-recipient State may outsource a specific function. An "inherently governmental function" may not be outsourced as doing so would evade the merit requirements as non-governmental employees would be performing governmental functions.

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No staff fired; their temporary contracts expired: We contracted with a temporary staffing agency for a specific time period to address the needs of the initial rollout of ReEmployME on the technical telephone line. Some of those temporary employees were kept on for a few weeks beyond their contracts; others were not, based on the volume of calls to that telephone line. 5. Inaccurate representation of who qualifies for unemployment (in interviews and social media) • 10-20% of people who apply for benefits do not qualify. Reasons for disqualification can include: o Able and available for work o Excessive earnings o Past fraud o Reasons for separation other than “no fault of their own” o Insufficient earnings in the base period o Exhausted benefits in the benefit year • Employees do not pay into unemployment, employers do. Maine should be proud of our ability to roll out this new system; many states have failed, including Pennsylvania, California, Colorado, Michigan, New York, Texas, New Jersey, Wisconsin and Kansas. I hope this clarifies our position on all of this and gives you what you need to ensure that your Committee is as informed as it should be.

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