Labor department seeks unemployment-insurance staffing, warns trust fund borrowing may continue through 2028

Connecticut Department of Labor (DOL) officials told the Appropriations Subcommittee that pandemic-era federal funding for temporary UI staff has ended, leaving the agency with a lower permanent staffing baseline just as workloads for customer service and fraud investigations remain high.

Staffing request: the governor’s proposed budget includes funding for nine FTEs for unemployment-insurance operations and one FTE for the state’s paid sick-leave expansion. DOL said the Unemployment Insurance consumer contact center handles roughly 24,000 customers weekly during busy times and that, after federal funding expired, temporary staff counts have fallen from a pandemic peak (as high as 320 temporary staff) to the current baseline. Commissioner Dante Bartolomeo and staff asked for additional call-center and integrity-unit positions to reduce claim-processing waits and to continue anti-fraud work.

Fraud and integrity: DOL reported since the pandemic it has prevented about $4.6 billion in improper payments and processed more than 431,000 fraudulent applications; it described a recent rise in fictitious employers and coordinated schemes that require investigative capacity and automation. The department said automation and integrative systems have helped but require funding to scale.

Unemployment trust fund: DOL provided a cash-flow spreadsheet and said the state continues to borrow against the federal UI loan; the agency projects it will likely continue borrowing until roughly 2028 because loan interest and past legislation that reduced employer contributions have slowed the fund’s recovery. DOL noted an $30 million ARPA-derived reserve used to pay interest on the loan for employers has covered interest costs to date but is set to run out in 2027 unless the legislature provides additional funds.

Federal worker claims: DOL said federal workers and federal contractors file claims through the state system; their claims are paid and later reimbursed by the federal government (reimbursing-employer model), which can create timing and documentation issues when the federal employer must respond to requests for information.

Ending: the department urged legislators to consider additional staffing to maintain customer-service levels and to sustain integrity programs; DOL offered to host a deeper work session on the UI trust-fund cash-flow spreadsheet and to provide more detailed documentation for committee review.