Pam Milam calls the many months she spent fighting for her unemployment benefits the most difficult time of her life.
In the summer of 2011, Milam, who cut back her work hours so she could take care of her terminally ill husband, says she was given a choice by her employer: either return to work full time or be forced to resign. After she chose the latter, Milam, 52, of Hermitage, applied for unemployment benefits with the Tennessee Department of Labor and Workforce Development.
She waited two months to be told her application was rejected on the grounds that she chose to quit, even though such forced resignations can be covered under the benefits program.
Milam appealed the ruling to an appeals tribunal and lost. She appealed that ruling to a designee of the department's commissioner, and lost again.
It wasn't until Milam hired an attorney and sued in Davidson County Chancery Court that a judge finally ruled that she was entitled to her back benefits - nearly $14,000. And even now, nearly two years after the ordeal began, Milam still has not been paid because of a clerical error by the state, which wrongly listed her separation date as 2012 instead of 2011, thus cutting her award approximately in half.
Adding insult to injury for Milam, the very employer fighting her tooth and nail was the state Department of Labor, where she worked for six years, capping off an 18-year career in state government.
Milam's struggles to get her unemployment benefits are not an anomaly. An audit released late last month found that the Department of Labor's customer service for the unemployed had sunk to a new low. A months-long wait for unemployment checks was normal as state workers were unable to process a backlog of thousands of claims. The department's claims center hotline routinely made unemployed callers wait on hold for hours, and less than one-third of callers even got through to file their initial claim over the phone.
The Tennessean interviewed workers, and other stakeholders, who navigated the state's unemployment system in recent years, and reviewed statistics related to the Department of Labor's customer service. The review found a department that gave tens of thousands of struggling unemployed Tennesseans the impression that the system was stacked against them.
Besides problems responding to unemployment claims, the audit found the state had paid out more than $73 million in overpayments to unemployed workers, awarded payments to dead people and state workers and was charging many businesses higher premiums because of a heavy backlog in processing claims. Shortly before the audit was released, Commissioner Karla Davis, who was appointed by Gov. Bill Haslam, resigned last month, and the department said it is working on a corrective action plan to improve its operation.
In 2012, the department's promptness in responding to first-time eligible claims - a nationally recognized metric of a state labor department's customer service - hit rock bottom. The results were far lower than even early 2009, when the recession brought a crush of unemployment claims.
Additionally, The Tennessean found that unemployment hearing officers who make initial determinations whether an unemployed worker is due benefits lack mandatory training. Critics say that can lead to an unpredictable system for workers and employers.
"It was the most difficult time in my entire life," said Milam, whose husband died shortly after she was forced to quit. "I lost my loved one. I just pretty much lost everything that meant anything to me. That was my career. I lost any chance of having any kind of retirement. I worked hard to obtain that security of having that something to look forward to.
"I was devastated. My family asked how did I make it. If it weren't for God and being a Christian, and depending on the family and the Lord, I probably would have lost my mind. I was pretty close to being hospitalized."
While some unemployed workers described dealings with the Department of Labor in recent years as a minor irritation, others said the system was so disorganized it put their lives on hold.
By the time 28-year-old Holly Taylor was laid off from a Goodlettsville day care in March 2012, the state's unemployment backlog was growing rapidly, eventually numbering 10,000 slow-moving claims, auditors found.
After filing for unemployment, Taylor, of Hendersonville, waited a couple of weeks to receive a confirmation letter. Then, six weeks later, she hadn't received payments. Like many others, that's when Taylor called the department.
She said she waited three hours on her first call - enough time to run errands while waiting for an answer.
"I just put my phone on speaker and went about doing whatever it is I needed to do," she said.
When Taylor finally got through, the state employee on the other end was friendly and apologetic but attributed the wait to too few people available to answer calls. Auditors said the state had 95 workers answering the phone in July 2011 and added 27 more workers over the next 15 months, but even that had a "negligible" impact on decreasing waits.
Taylor's wait for her initial check was not unusual.
According to the U.S. Department of Labor's employment and training handbook, a state labor department should send out 87 percent of its unemployment checks for first-time claims within two weeks. For more than a decade, Tennessee regularly eclipsed this standard, according to federal statistics reviewed by The Tennessean.
Between 1998 and 2009, the state met that federal standard for first-time claims in every month but one.
Then came the recession of late 2008 and early 2009, when Tennessee, like the rest of the nation, experienced a rash of layoffs. In January 2009, the rate fell to 77.1 percent of approved claims receiving checks within two weeks. Throughout the height of the recession, when there were regularly more than 20,000 claims per month and as many as 53,384 claims one month, the department's response rate fell below the federal target, but it never dipped below 77 percent.
But in 2012, one year after Davis was hired and her top aides took charge, the rate at which the department sent out checks to first-time claimants fell precipitously.
The response time fell every month in 2012, bottoming out at 48 percent in August, when there were just 10,522 new claims - far fewer than the peak recession months. The Comptroller's audit released last month attributed the delay to a mounting backlog. Through August, there were 10,968 backlogged claims.
"It was extremely hard. I think I ended up having to borrow money to make it through until I got my first check," said Heather Rolley, 37, of Lebanon.
Rolley, laid off from a hospital and a single mother of three, said she expected her first check in two weeks but waited almost a month.
"I remember I kept expecting that check because I was needing the money," she said. "At the time, I was used to getting a paycheck. When you're single and raising three children, it's more or less living check to check."
Before an unemployed worker ever begins his long wait for an unemployment check, he must file his initial claim, but the Department of Labor's hotline proved dysfunctional and overloaded.
According to the audit, just 32 percent of the calls it reviewed were answered by someone in the Labor Department's claims center. The average wait time for those who did get through was two hours. Some who endured long-term unemployment became hardened to the delays, resorting to workarounds to get answers and other tricks to try to get faster service.
In Brentwood, Cynthia Kelly, 52, said she would call the department an hour before the phone lines officially opened, believing she would get faster service when employees got to work. She also visited her local labor office.
"They'd say you need to get back on the phone and wait your turn," she said.
Sometimes when she called, a message would say lines were full. Other times, she couldn't even connect, a problem auditors attributed to overwhelmed supervisors deciding to block any more incoming callers.
"They'd say the holding time was an hour. You're sitting there holding the phone for two hours," Kelly said.
Lack of consistency
If employers or unemployed workers want to contest the initial decision related to their claim, their fate lies in the hands of an unemployment hearing officer. Some lawmakers say those unemployment officers have not been properly trained. Lt. Gov. Ron Ramsey, R-Bloutville, and Sen. Jack Johnson, R-Franklin, are pushing legislation that would make such training mandatory.
The bill, which also would slash dependent benefits for unemployed workers, is being pushed by the Tennessee chapter of the National Federation of Independent Business. NFIB state director Jim Brown said employers and workers deserve consistency in determining whether unemployment benefits are owed.
"Our concern was you have turnover (among hearing officers), you have laws; we were hearing inconsistencies in decisions," Brown said. "For both sides - employers and employees - that's not good. You want more consistency and application of the law."
A spokesman for the department said it was too soon to outline long-term changes that will be implemented to improve customer service. Spokesman Jeff Hentschel said initial steps have already been taken to address the backlog of claims and improve the hotline function.
"We have cross-trained interviewers to bolster our (staff that considers initial claims), and we are offering overtime to our adjudication staff before, after their shift, and on weekends," Hentschel said. "We are moving the self-service modules of the phone system to the front of the cue next Wednesday. If interviewers are busy, every claimant will be able to reach our self-service options. In the old configuration, if all lines were taken by interviewers, claimants could not call and access self-service functions such as claim status and address changes."
Milam said she believes the department can be fixed.
"I guess the word I would use would be pandemonium," Milam said of dealing with the unemployment process. "I think it can be fixed. I hope so. Somebody needs to fix it because it can't keep going like this."