Written by Tony Gonzalez, The Tennessean
If you're unemployed in Tennessee, you are less likely than most jobless in other states to get a benefit check. And if you do get one, it will be for less money, according to federal data.
In the past year, Tennessee's average weekly unemployment check paid $235 - sixth-lowest in the nation - and just 17 percent of the state's unemployed actually got benefits, ranking fourth-lowest among the states.
Experts say Tennessee's stingy payouts and strict eligibility requirements, coupled with revelations about mismanagement of the state's unemployment program, leave them questioning whether Tennessee's system actually assists laid-off workers and buoys the economy as intended.
An audit released in March showed the Department of Labor and Workforce Development issued $73 million in overpayments in recent years while failing to monitor fraud and forcing thousands of out-of-work Tennesseans to wait months for their unemployment checks.
"The administrative issues exacerbate what already appears to be an inadequate program," said Rebecca Dixon, policy analyst at the National Employment Law Project. "Even if you fix all the administrative issues, if a program is only serving a very small percentage of people who lost their jobs, then it's not really doing what it was intended to do."
The state program has attracted criticism from many directions, including from employers who consider their payments into the system too costly, and lawmakers who say the benefits are still too generous. The legislature tightened eligibility last year and recently eliminated payments for dependents, which unemployed families had been getting since 2009.
Tennessee's jobless probably get so little because of prevailing opinions about the role of government, said Matt Murray, economist and director of the Baker Center at the University of Tennessee in Knoxville.
"The employers don't want to pay it and the workers find the benefits are inadequate - welcome to democracy, where nobody is happy," he said. "We throw it into the political Cuisinart and what we've got is the benefit structure that we've got."
While one would expect Tennessee's lower cost of living to equate to smaller unemployment checks, the state's maximum check remains below peers. According to statistics from the Missouri Department of Economic Development, Tennessee has the second-lowest cost of living in the country, behind Oklahoma. Among the 10 states with the lowest cost of living, Tennessee's weekly maximum check of $275 ranks lowest. Oklahoma, for instance, pays a maximum of $368.
Of course, Murray said, the checks aren't meant to completely replace income. The average weekly check of $235 translates to $12,200 per year. That's just above the federal poverty level for a single person, which is $11,490 this year.
"We don't want the benefits to be too generous, because that would give them less incentive to pursue work," Murray said. "At the same time, it's very hard to understand how a household can get by."
Many turned away
The first question for many laid-off workers is whether they qualify for help.
In the past year, fewer than half did. The labor department approved 48 percent of initial claims, turning away about 66,000 people.
States set their own standards for eligibility, and Tennessee's are among the most restrictive, said Dixon, who analyzes the federal government's annual state-by-state comparison of rules.
Difficulties in applying - such as long waits on the phone that auditors found in Tennessee - can also deter applicants.
In the past year, 17 percent of unemployed Tennesseans got benefits. That rate has ranked low nationally and has fallen the past four years. The national average is 26 percent.
Appeals process confuses some
For many people denied benefits - about 17,000 last year - the next step was to appeal, asking the department to reconsider. (Employers and employees can appeal claims decisions in Tennessee.)
Workers lost more appeals than they won.
The labor department's hearing officers sided with employers in 69 percent of 23,234 appeals last year.
Far fewer disputes continued to a second appeal - just 3,042. The outcome was similar, with more than two-thirds of decisions in favor of companies, unsurprising because the overwhelming majority of second appeals support original decisions.
After two appeals - heard within the department - the next step is to ask a local court to rule. That's rare: Only 94 cases were filed in 2012.
From the time a claim is filed to the department's final ruling, benefits can hang in limbo for months. In one Sumner County case, a woman who resigned from a state government job was granted benefits. But she saw them taken away on appeal, then approved on second appeal, then taken away again.
She took her case to court and awaits a hearing.
Despite the wait, the federal government regularly finds that Tennessee's appeals process meets its standards for fairness and surpasses the national average for speediness of hearings.
Still, some say the process is tough to navigate.
Lindsey Pickle, a single mother in Nashville, was one of 94 people in the state who went through both appeals and then filed for a court review last year.
Pickle, who was let go by a food service employer, said she applied for unemployment benefits believing they'd be approved. Although surprised at being denied, she remained optimistic about appealing.
"They made it sound so easy," she said.
Instead, during the hearing, she said she felt blocked from sharing her side of the story. Documents she prepared were not admitted, and by the time it was over, she "had a very bad feeling."
Pickle eventually hired attorney Jason Barnette before going to court. She wishes she'd found him sooner.
Barnette said the first appeal is crucial because that's when evidence can be entered into the record, setting the stage for future appeals.
Steven Christopher, managing attorney in the Gallatin office of the Legal Aid Society, said common mistakes for the unrepresented include missing filing deadlines, failing to prepare paper records and telling stories in haphazard ways.
"When I'll listen to hearings ... I get horrified by how the claimant will just sort of jump in halfway and just present the story in a way that is very disorganized," Christopher said. "The hearing officer has to understand what happened to make a decision."
Some changes are afoot. Lawmakers and department leaders want higher standards and more training for the officers who handle appeals hearings.
"It seriously feels like it's totally biased toward the employer," Pickle said. "I've never been in trouble - ever - so this is a big deal for me, for them to say I've done something wrong."
Employers also seek improved process
Employers lodge their own complaints about the benefits system and appeals process.
Jim Brown, state director of the Nashville Federation of Independent Business, said employers want a clear process for challenging bogus claims by former employees.
"It's important for employers to be able to track the claims and be able to respond in a timely fashion," he said.
The labor department's problems with overpaying benefits decreases confidence in that process, Brown said.
Employers, though, could soon benefit from a decrease to the unemployment insurance tax rate. Last year, the rate ticked downward for the first time since 2009. The average rate remains slightly below the national average.
Murray, the economist, said that rate isn't a major factor in business decision-making. But he said the functioning of the benefits program impacts the state economy.
"Benefits represent a form of an automatic stimulus in the economy," he said. "These programs (are) intended to benefit households, but also the economy at large, for the people who lose purchasing power."