Unemployment Insurance Modernization: Investing in Arizona’s Workforce

In his 2021 State of the State Address earlier this year, Governor Doug Ducey stated that “The rest of life doesn’t stop in a pandemic, least of all our basic responsibilities.” Our goal has been and continues to be supporting Arizonans through crises while we work with them to bridge the gap to self-sufficiency. Our economy is rebounding and opportunity is returning for our citizens, our communities and our state. We have also been afforded the opportunity to strengthen our unemployment and workforce services and reinforce the foundation upon which our state’s economy relies.

Throughout the pandemic, an unprecedented number of Arizonans experienced unemployment, and were forced to rely on state Unemployment Insurance (UI) and a brand new Pandemic Unemployment Assistance (PUA) program, alongside other state and federal assistance, to keep their roofs over their heads and food on their tables. As the Arizona Department of Economic Security (DES) collaborated with federal, state and local partners to provide for and support those impacted by the COVID-19 pandemic, we stood up new federal programs and made improvements to existing programs to meet the surge in demand across our communities. While thousands of Arizonans are returning to work each week, our efforts to improve upon efficiencies continue.

The demand upon our systems during the COVID-19 pandemic and the experiences we’ve seen among our clients demonstrated opportunities to develop and modernize the Arizona UI technology system. As such, DES has identified appropriate federal funding and is seeking additional funding to improve the decades-old technology systems underlying unemployment programs. DES intends to release a Request for Proposal (RFP) through the Arizona Procurement Portal by the beginning of October 2021, with the purpose of awarding a contract with one or multiple suppliers to modernize the UI benefits system.The UI benefits system modernization will increase staffing flexibility, decrease time needed to implement programmatic changes and result in a better client experience overall. 

The UI program is one of several facets of Arizona’s workforce development system, and works in concert with employment and disability services to help job seekers overcome barriers to employment. While the UI benefits program is our current priority, we intend to advance every component of the State’s workforce development system, reinforcing the foundation upon which our economy continues to grow. Subsequent RFPs are being planned to modernize the remaining UI and workforce systems. 

Funding from the Families First Coronavirus Response Act, the American Rescue Plan Act of 2021, and a small surplus in a UI administration fund are being reserved for this system modernization. The Department is seeking additional funding in the State Fiscal Year 2023 budget to close any potential gaps in funding for the overall project. 

The age and complexity of the existing UI system will cost the state significantly more over the years as we continue to maintain, adjust and repair. System modernization is not only sensible from a fiscal perspective, it is a crucial investment into our labor force. It will help to support those who face disruptions in employment as the rest of the workforce development system works with them to rebound and find their place again in the state’s economy. Arizonans will continue to be supported each step of the way, from filing an unemployment claim, to registering for services with [email protected]. 

Michael Wisehart

9/9/2021