The Government Accountability Office (GAO) recently released a report exploring the strengths and pitfalls of Pandemic Unemployment Assistance (PUA) and how it temporarily expanded unemployment benefits to those without traditional employment arrangements.
Why this GAO report matters
In this comprehensive evaluation of PUA, the GAO assesses the extension of Unemployment Insurance (UI) benefits support to non-standard workers. The report examines several facets of PUA, including how the pandemic affected non-standard workers and the extent to which the UI system assisted these workers. As there is no formal policy on how to best provide unemployment benefits to the non-standard workforce, the report’s recommendations provide a foundation for how state and federal can support unemployed non-standard workers in the future.
Important definition
The GAO uses the term “contingent workers” to generally refer to the non-standard workforce–those with “temporary or gig employment, independent contractors, and self-employed workers” [1].
Key takeaways from the report & how SteadyIQ can help
1. Exploring beyond PUA
The GAO report recommends that the Department of Labor (DOL)study and advise policymakers on the costs, benefits, and risks related to providing UI to those non-standard workers that were covered under PUA (and previously, only covered within declared disasters). The DOL agreed with this recommendation. This is a crucial first step, given that the extension of UI to non-standard workers ended with the conclusion of PUA. The report acknowledged that without further study and evaluation of expanded UI, the “DOL cannot realize its vision for a modernized UI system that provides a lifeline to all workers” [47]. The DOL’s agreement with this recommendation is a huge step forward for the non-standard workforce.
How SteadyIQ can help: With data gathered from serving nearly 6 million non-standard workers, SteadyIQ has unique market intelligence and real-time insight into these costs, benefits and risks.
2. Understanding key challenges in PUA implementation
The GAO identified several challenges experienced by non-standard workers who applied for benefits through PUA, including extra long wait times, difficulty with income verification, and poor customer service. On the administrative level, the report called out the IT and staffing challenges related to verifying income and other necessary documentation. Identifying these challenges opens the door for innovative solutions.
How SteadyIQ can help: SteadyIQ’s income verification minimizes manual dependencies and provides real-time data. SteadyIQ use cases in Alabama and Louisiana show claim processing times of less than 5 minutes, compared to 15-60 minute processing times without the SteadyIQ solution.
3. Identifying key risks for fraud
The GAO cited the propensity for improper payments and fraud as one of the major risks identified with providing UI to the non-standard workforce, with income self-verification named as a critical vulnerability. Even after requirements changed and documentation of income became required, the systems in place did not fully protect states from fraud. PUA overpaid $13.3 billion in benefits between April 2020 and December 2021, attributable in large part to fraud. As we look to the future, there are many opportunities to protect both claimants and states from fraud.
How SteadyIQ can help: With claimant consent, SteadyIQ’s income verification tool pulls income data directly from claimant deposit accounts and payroll accounts rather than relying on claimant-provided data to verify benefits eligibility. This results in a 90% reduction in fraud and lower administrative costs and burden.
4. Uncovering racial inequities in PUA delivery
The GAO report found significant racial and ethnic disparities in receipt of PUA benefits in three of the four states it examined. This is consistent with research that has found persistent racial inequalities in the broader US unemployment insurance system. Recent research found that, on average, Black claimants receive a 18% lower replacement rate - the dollar amount of benefits divided by prior income - than White claimants. This dynamic was perhaps magnified during PUA, as racial minorities over-index in non-standard work that is low-paid. Addressing these racial disparities in the eligibility process and ensuring that non-standard workers get covered is crucial.
How SteadyIQ can help: Employing a tech-driven solution can increase access and equity by eliminating the paperwork burden on claimants, avoiding mistakes that come from manual submissions, and improving accessibility for workers without a traditional, W-2 pay stub.
Moving forward
This report and the GAO’s recommendations open the door for discovery into how UI can be expanded to more fully meet the needs of the modern workforce. The strengths and challenges identified through the implementation of PUA bring the needs of the non-standard workforce to the forefront. Though PUA has concluded, the policy conversations regarding the benefits owed to the non-standard workforce have just begun. Having the right systems in place will protect from fraud vulnerabilities and allow workers to access their much needed benefits in a timely way.
SteadyIQ partners with employers, governments, and financial institutions to understand and better serve the 36% of the workforce classified as non-standard.
