HONOLULU — The Hawaii Department of Labor and Industrial Relations will receive $11 million in federal funding to update its much-maligned unemployment insurance system.

What You Need To Know

  • The funding comes via a UI Information Technology modernization grant from the U.S. Department of Labor’s Employment and Training Administration

  • The funds will be used to update the state’s UI systems to ensure they are user-friendly, accurate in determining and distributing unemployment benefits, and better able to prevent UI-related fraud

  • Historic job losses during the pandemic worsened existing issues in the unemployment insurance system, and states had problems processing unemployment insurance claims due to outdated IT systems

  • From 2020 to 2021, improper unemployment insurance payments skyrocketed from approximately $8 billion to $78.1 billion, according to the labor department

The funding comes via a UI Information Technology modernization grant from the U.S. Department of Labor’s Employment and Training Administration. It will be used to update the state’s UI systems to ensure they are user-friendly, accurate in determining and distributing unemployment benefits, and better able to prevent UI-related fraud.

“The COVID-19 pandemic showed us all the critical importance of a robust, responsive unemployment insurance system,” said U.S. Sen. Mazie Hirono, a member of the Senate Committee on Small Business and Entrepreneurship. “As we work to modernize our UI system in Hawaii, this much-needed funding will help update outdated systems in order to increase efficiency in processing unemployment insurance claims and protect against fraud.”

As Hirono acknowledged, historic job losses during the pandemic worsened existing issues in the unemployment insurance system, and states had problems processing unemployment insurance claims due to outdated IT systems. This led to delayed payments, increases in fraud, and substantial disparities in benefit payments according to race and ethnicity, according to Hirono’s office.

Improper payments were already a problem before the pandemic. However, from 2020 to 2021, improper payments skyrocketed from approximately $8 billion to $78.1 billion, according to the Labor Department.

As part of the American Rescue Plan Act of 2021, DOL was appropriated $2 billion for unemployment insurance modernization to better detect and prevent fraud, ensure timely payment of benefits and promote equitable access to unemployment insurance.