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Labor & Employment

Oregon Gov. Kate Brown Fires State Employment Director After COVID Failures

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Problems within the state agency have left tens of thousands of newly unemployed Oregonians waiting weeks and months for benefits in the midst of the coronavirus pandemic.

UPDATE (3:18 p.m. PT) — Oregon Gov. Kate Brown has fired the head of the state’s embattled employment department, the culmination of technological and logistical breakdowns at the agency that resulted in tens of thousands of newly out-of-work Oregonians being forced to wait weeks and months for unemployment benefits in the midst of a global health crisis that has all but shuttered the state economy.  

Brown announced that she had asked for and received the resignation of Kay Erickson on Sunday, a day after state lawmakers grilled Erickson over her department’s poor performance during the COVID-19 pandemic. 

“In the middle of this pandemic, the continued delays from the Oregon Employment Department in delivering unemployment insurance benefits to thousands of out-of-work Oregonians are unacceptable,” the governor wrote in a press release. “This is an unprecedented crisis, and the problems at the department demand an urgent response. I’d like to thank Director Erickson for her years of service to the State of Oregon, but it is clear that new leadership is needed.”

Erickson’s resignation is effectively immediately. She’ll be replaced on an interim basis by David Gerstenfeld, who had run the department’s paid family and medical leave insurance division.

"Today's announcement of new leadership at the Oregon Employment Department provides a much-needed opportunity to get countless unemployed Oregonians the urgent help they are counting on during this economic and public health crisis," U.S. Sen. Ron Wyden, D-Ore., said Sunday on Twitter.

Wyden had called for Erickson's removal.

"Now it's critical to take every step possible toward quickly ensuring all Oregonians thrown out of work through no fault of their own get the unemployment benefits they need to weather this storm," he tweeted.

The Employment Department has received more than 445,000 applications for traditional unemployment benefits since March 15. On Friday, agency officials said they had paid those benefits to 245,000 people — about 55% of applicants. Some of those applicants were found ineligible for benefits or never filed a weekly claim.

Many were rejected for traditional unemployment benefits, but have since applied for the pandemic unemployment assistance authorized under the federal CARES Act. State officials have not provided a clear assessment of how many of those self-employed and gig workers have applied and are still awaiting benefits.

State lawmakers and even members of Oregon’s Congressional delegation have been demanding answers from the employment department, and more recently, demanding more involvement by the governor.

Erickson and Gerstenfeld faced three hours of questions Saturday from state legislators – a follow-up appearance from initial testimony Wednesday, when department officials presented a long statement to a legislative committee that did not allow time for questions afterward.

In the intervening few days, state legislators expressed mounting frustration at the lack of answers and accountability. U.S. Sen. Ron Wyden called Saturday morning for Erickson’s resignation. And at the Saturday legislative hearing, Rep. Jeff Barker, D-Aloha, suggested he did not see a way forward without a leadership change:

“I’m just really frustrated listening to all of this,” Barker said about 90 minutes into the hearing. “… I’m sorry to say it, but you’ve been overwhelmed. Maybe someone else needs to take over the leadership of the department and try to get it up and running. I don’t know what else to say.”

Oregon’s unemployment rate was 3.5 percent before COVID-19 struck here, a historic low. In April, it hit 14.2%. About 266,000 Oregonians reported losing their jobs that month.

The resulting rush of unemployment insurance claims has overwhelmed state government, which was asked to process an unprecedented deluge of claims and simultaneously adapt its archaic computer system to handle new rules authorized by the CARES Act.

Officials within the Employment Department have said old technology and inadequate staffing have created the massive backlog Brown has ordered them to clear.

It’s not yet clear how or when state officials will be able to do that.

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