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Oregon Employment Department Agrees To Settle Class Action Lawsuit Over Benefit Delays

The Oregon Employment Department's homepage.
The Oregon Employment Department's homepage.

The agency was sued over lengthy delays paying unemployment benefits during the pandemic. Now, it has reached a settlement agreement with the Oregon Law Center.

A class action lawsuit against the Oregon Employment Department over long delays paying unemployment benefits is headed towards settlement.

The Oregon Law Center and the Employment Department announced they had reacheda settlement agreement and asked for preliminary court approval.

In the original case, more than a dozen people sued the agency and acting Director David Gerstenfeld over payment delays that stretched for months, as well as over barriers to applying for benefits in languages other than English. At the time, there wasn’t even a Spanish language application for regular benefits available online and phone lines with access to interpreters were jammed. After the agency largely paid the original petitioners’ benefits, the Oregon Law Center succeeded in turning the case into aclass action lawsuit, representing tens of thousands of Oregonians who had waited more than four weeks for benefits.

In the proposed settlement agreement, the Employment Department commits to:

  • Meeting federal timeliness standards for paying unemployment benefits by March 1, 2021
  • Meeting federal timeliness standards for adjudicating claims (resolving eligibility issues) by April 1, 2021
  • Working through the adjudication backlog (as of mid-January) by March 1, 2021
  • Making its regular unemployment application available online in Spanish, with a May target date
  • Eventually providing online applications for regular unemployment benefits and Pandemic Unemployment Assistance in a minimum of ten languages
  • Providing outreach to people with limited English proficiency who were unable to access benefits because of language barriers, while allowing them to backdate claims to the extent allowed by law

Over the course of the lawsuit, the Employment Department described being overwhelmed by an historic flood of unemployment claims. It detailed the steps it took to process and pay them, including hiring hundreds of new staff.

But court documents filed in the case also revealed that the state’sadjudication backlog was larger than publicly described. That backlog contributed to the state’simmense wait times. Court documents also showed one of the steps the agency took to streamline the claims process: it decided to treat many gig workers as employees, paying them regular benefits from a state trust fund rather than federal benefits for independent contractors.

The Employment Department is not admitting liability as part of the proposed settlement and, in the settlement agreement, the agency denies being in violation of any laws.

Copyright 2021 Oregon Public Broadcasting

Kate Davidson is OPB’s business and economics reporter. Before moving to Oregon, she was a regular contributor to "Marketplace", a reporter at Michigan Radio focused on economic change in the industrial Midwest and a producer at NPR.