Modernization efforts are moving forward for Wisconsin's outdated unemployment system

Workforce officials announce $16.5M contract for overhaul following major pandemic problems.

The Wisconsin Department of Workforce Development's headquarters in Madison, as shown in this Sept. 2, 2020, file photo. Angela Major / WPR

The Wisconsin Department of Workforce Development moved forward Wednesday, Sept. 29, with plans to modernize the state's unemployment insurance system as it emerges from problems brought to light by the COVID-19 pandemic.

Madison-based software development company Flexion will help bring the department's decades-old computer systems and technology up to date as part of a $16.5 million contract. Flexion was chosen as part of a bidding process that attracted 18 applicants, according to a press release .

"This contract represents just one aspect of DWD's multifaceted approach to improve service for our customers, including employers, job seekers, current employees and those experiencing disruption in their employment," DWD Secretary Amy Pechahek said in a Wednesday morning media briefing. "The first steps of the project will establish a solid foundation for a new system that will be flexible and dynamic to meet changing needs."

The economic shutdown that began in March 2020 as the state reckoned with the early impact of the coronavirus created a backlog of hundreds of thousands of unemployment claims as the system struggled to cope with the influx of claims. In some cases, potential applicants couldn't get through to the department's call center to complete the process.

"With the pandemic, we saw a significant increase, you know, day over day ... and it was exacerbated in our state by the antiquated technology and our inability to process code and move through just the sheer volume of claims," said Pechahek.


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The department also stumbled in implementing federal pandemic unemployment programs. DWD overpaid millions of dollars in unemployment benefits in April because of technology errors, according to a Legislative Audit Bureau report.

The ongoing difficulties came to a head in September 2020, when Gov. Tony Evers fired Caleb Frostman, the department's secretary at the time. At that point, DWD was still processing around 713,000 claims made since the start of the pandemic.

Pechahek said the department has been working on a number of changes in recent months, including updates to its claims portal . She said people looking to apply for unemployment are now able to upload documents supporting their claims directly to the portal, rather than having to mail or fax them, as was previously the case.

Another initiative the department has taken is simplifying language used in applications.

"They were very long, wordy questions in the application full of jargon, lots of acronyms," said Pechahek. "The application is now in plain language to be more accessible and more clear about what the department is looking for in terms of information to be able to process benefits quickly."

DWD is working to release updates to the unemployment system as they become ready, said Stacia Jankowski of the department's Office of Integrity and Accountability.

"Our modernization strategy reflects an iterative approach to ... customer service improvements as soon as possible while claims processing continues uninterrupted," said Jankowski.


Jankowski said the overall cost of those modernization efforts was projected to be around $80 million. According to the department press release, federal funds from the American Rescue Plan Act and the CARES Act are paying for those upgrades.

The changes would bring more timeliness and automation into DWD's operations, such as in the addition of chat bots and virtual agents, said Neeraj Kulkarni, the department's chief information officer and IT bureau director.

"DWD will be able to respond quickly to changing UI needs through greater flexibility in hiring and training resources to assist in times of need because using the system will be familiar and intuitive," said Kulkarni.

In recent months, the department has also entered partnerships with Google Cloud Platform, NICE CXone, and a U.S. Department of Labor Tiger Team . The latter partnership is meant to help DWD expand efforts against fraud, according to the press release.

Other changes in the pipeline include modernizing the department's call center to allow extended hours and make it so applicants can file and keep track of claims over the phone. Pechahek said she expected that project to be completed in February of next year.

Wisconsin Public Radio can be heard locally on 91.3 KUWS-FM and at .

Wisconsin Public Radio, © Copyright 2021, Board of Regents of the University of Wisconsin System and Wisconsin Educational Communications Board.

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