COLUMBIA — Delays by a South Carolina Cabinet agency in distributing unemployment payments are drawing federal scrutiny.
The U.S. Department of Labor last month placed the S.C. Department of Employment and Workforce on a watch list for “extremely low” promptness of first payments to unemployment recipients.
The department could step in if the problem isn’t resolved.
The development is the latest challenge for a state agency that’s drawn the frustration of some lawmakers who want faster reform.
“The last thing we want to happen is have the feds come in because they would only make it worse,” said Sen. Kevin Bryant, R-Anderson. “We need to look at this problem and see if there’s something we can do to fix it.”
Bryant said part of the solution would be a “more active, get-it-fixed-now approach” to the department from Gov. Nikki Haley.
“There’s a culture over there that needs to change,” Bryant said.
Haley’s spokesman said she’s deeply involved in the effort to improve the Workforce Department.
“The governor meets with (agency Executive Director Abraham Turner) every month, and our policy and legislative staff meet with him or his staff at least once a week. We’re plenty engaged,” Rob Godfrey said in a statement.
He said the first-payment problem was identified as an issue as Haley came into office; progress is being made; and the governor’s office is hopeful the issue will be fully resolved by the end of the year.
Legislators overhauled the Workforce Department in 2010 after an audit showed the state spent more than $170 million over three years on benefits for employees fired for cause.
Haley signed a bill into law this year limiting benefits to those fired for misconduct.
According to the workforce agency, getting first checks to the unemployed on time has been a struggle since 2009 after the recession hit and the number of applicants spiked.
Agency spokeswoman Mary-Kathryn Craft said another issue was the Legislature’s 2010 decision to lengthen the amount of time employers had to respond to a claim. The deadline went from seven calendar days to 12 business days, but last year the law was altered again, this time to 10 calendar days.
Some other states also have had a problem getting first checks out on time. But South Carolina, where an average of about 60,000 people receive unemployment benefits each week, is one of only 15 states in danger of federal intervention for first-payment time lapses.
The Labor Department currently designates nine states as “at risk” and another six, including South Carolina, as “marginally at risk.” The Palmetto State could join the former group if it continues to show poor performance.
At that point, the Department of Labor would implement “more intensive technical assistance and monitoring,” agency spokesman Jason Kuruvilla said in a statement.
The federal standard for unemployment payments is for 87 percent of applicants to receive their first check within three weeks. The most recent national average for the payments was 84.4 percent and is ticking up, the Labor Department said.
South Carolina’s performance dipped close to its lowest monthly level in the last two years in May at 60.88 percent. The first-payment rate jumped to 83.2 percent in June, the best performance this year.
The hurdle for the state will be maintaining that clip. First-payment performance has been up and down with each new month this year.
Craft said the workforce agency is addressing the issue by contacting all employers at least twice before the 10-day deadline to urge them to respond to a claim. Benefits are automatically awarded to applicants if a business doesn’t respond in time, she said.