With federal funding dried up, major Nevada unemployment claim backlog returns

Officials say the unemployment claims backlog is now as bad as at points earlier in the pandemic, as the state grapples with a drastically reduced unemployment workforce amid a dry-up of federal funding. 

During a legislative interim Commerce and Labor Committee meeting Tuesday, officials with the Department of Employment, Training and Rehabilitation (DETR) noted there was a backlog of 33,495 unemployment claims as of March 1. 

While that’s smaller than the backlog of hundreds of thousands of pending claims seen at times over the last two years, it’s significant considering the state is receiving only about 8,000 new claims per month.

Only 53.1 percent of claims are being paid within 14 days of the end of the first claimed week. The Department of Labor’s standard for payouts on claims is 87 percent for that two-week timeframe.

At the height of the pandemic’s unemployment crisis, when hundreds of thousands of people submitted claims in a matter of weeks, the federal government rushed aid to beleaguered unemployment departments, granting the flexibility to hire short-term contract staff and providing millions of dollars to bolster staffing. But much of that came to a hard stop in recent months.

DETR Director Elisa Cafferata said that DETR is down almost 500 staff members because of changes in federal regulations not allowing for contract staff, reduced funding and employees returning to other government departments such as the welfare division.

“We are running out of the legal authority and the money and the people with expertise to do this work,” Cafferata said. “This is the most frustrated I’ve ever been because if you lost your job, the need is just as great now as it was during the pandemic.”

The backlog arrives as Gov. Steve Siolak and other state leaders have touted 

Nevada as having the nation’s best economic momentum out of the pandemic and as the state hit an unemployment rate of 5.1 percent, far below a pandemic peak of about 28 percent. 

But it also comes as Nevadans face punishing rent hikes, inflation and less generous benefits than earlier in the crisis.

“These are people that can’t pay their rent, can’t buy food, can’t pay their electricity. And some of the people that have emailed me, have been waiting for over nine months,” state Sen. Roberta Lange (D-Las Vegas) said during the Tuesday meeting. “How can we help get them to whole again, sooner?”

Cafferata responded that she knows people need the money as soon as possible. Still, the agency has to process claims in the order received, and there’s a backlog that is several months long. 

Under federal guidelines, DETR can no longer use contract employees who had helped address a backlog during the height of the pandemic. Cafferata noted that the agency had trained contract employees to process unemployment claims. As those employees leave, DETR has to hire new employees with no experience and train them, which takes time, money and effort.

Cafferata said it would help significantly if the Department of Labor gave DETR the staffing flexibility to get through the backlog. 

Though the department gave DETR flexibility at the beginning of the pandemic to not require having government employees do the work, that flexibility ended in September 2021. 

DETR has been working with Nevada’s congressional representatives to try to address the loss of staffing flexibility and the loss of ability to bring in contract workers, Cafferata said, but nothing has panned out yet.