Virginia Unemployment Agency Hires PR Firm for $124K

Coronavirus unemployment form
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A Virginia state agency that has faced criticism for its handling of an unprecedented flood of claims for unemployment benefits has hired a well-connected lobbying and communications firm to help with public relations, according to a purchase order.

The Virginia Employment Commission will pay Capital Results for services including press releases, reporter briefings and social media campaigns, according to a report obtained through the state's procurement website. The cost is listed at $124,000.

“Just as VEC has hired additional staff and used third-party vendors to assist with processing claims and fielding phone calls by claimants, we needed additional support in our communications efforts,” spokeswoman Joyce Fogg wrote in an email Monday in response to questions from The Associated Press. “VEC has a one-person communications department. The number of requests for information is overwhelming.”

Dozens of Democratic Virginia lawmakers called for reforms at the agency last week, saying in a letter that they were worried about its ability to “adequately address” the high volume of claims sparked by the COVID-19 crisis. Republican state lawmakers and Democratic U.S. Rep. A. Donald McEachin have also separately raised concerns.

The legislators say their offices have been flooded with calls and emails from constituents having trouble accessing unemployment benefits or reaching anyone at the commission for help. News outlets have documented similar issues.

The VEC's director and Gov. Ralph Northam's chief workforce adviser have both defended the agency's work. It has been dealing with a historic number of applications for benefits unleashed by the economic shutdown measures intended to slow the spread of the novel coronavirus and has paid more than $6 billion in benefits since the start of the pandemic. At the start of the crisis, it had a workforce that had shrunk since the Great Depression and an antiquated unemployment insurance program that was about to be upgraded.

“We're very cognizant of the fact that so many Virginians in very desperate circumstances are waiting for these benefits,” Commissioner Ellen Marie Hess told lawmakers in a virtual meeting of the state Commission on Unemployment Compensation Monday.

She said most people who file a claim without any errors are paid within two weeks, and staff are doing all they can to expedite cases where adjudication hearings are necessary.

The agency's PR contract with Capital Results began on May 18 and ends Aug. 2, Fogg said. It is the only public communications-support contract the agency has had during the pandemic.

Fogg said the firm has also been helping the VEC make changes to more effectively communicate on its website. And Capital Results has also been sending lawmakers emailed updates about the agency’s work, according to messages shared with AP.

“The agency has a small but hardworking staff, and we are proud to be supporting them in their work and expanding their capacity to serve Virginians,” Jay Smith, a partner at Capital Results, said in a statement.

Hess, the VEC commissioner, also told lawmakers Monday that while Virginia started the year with a record high unemployment trust fund balance — which is funded by state unemployment taxes — the fund is projected to end the year $750 million in the red, which would be a record low.

Absent action from the federal government, “there will be significant impact to Virginia employers come January,” she said.

Other states across the nation face a similar situation and have also faced criticism about delays in benefits or responsiveness. Anger welled in Florida earlier this year -- and continue to linger -- because the state’s antiquated unemployment system could not handle the hundreds of thousands of applicants. Some endured many weeks, if not months, of waiting for their benefits to arrive.

Lawmakers thanked Hess for her hard work and dedication in the meeting Monday. One said Hess had one of the most difficult jobs in the Commonwealth.

“I understand that you all have a great deal of work on your shoulders, but I also hope that at some point we can feel comfortable with the staffing and folks can feel good about the ... expedience of the responses that they get in these uncertain times,” said Del. Lamont Bagby, who chairs the commission.

A persistent complaint from laid-off workers has been with getting in touch with the commission by phone.

A separate notice posted on the procurement website indicates the department will soon be issuing a request for proposals for “the delivery and support of a call center solution” for the commission's unemployment insurance claims and customer relations units at a cost of between $10 to nearly $50 million.

Fogg didn't immediately respond to questions about that notice.

Associated Press writers Alan Suderman in Richmond and Bobby Caina Calvan in Tallahassee contributed to this report.

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