The ‘black hole’ of unemployment benefits: Six months into the pandemic, some are still waiting for aid

The coronavirus-fueled recession has stressed states’ ability to pay timely unemployment benefits, resulting in financial hardship for many families. Sam Fornasiero, Brett Lawrence and Sam Thornton waited months. They’re among thousands. Nearly 400,000 people who received their first benefit payment in July had waited at least 70 days, according to Labor Department data.

The 21-year-old’s phone call was put on hold — a noteworthy improvement relative to the 2,000-plus prior attempts to reach New Jersey’s unemployment bureau, by his estimation.


The call went dead after a half hour of waiting.

But Fornasiero has gotten good at waiting.

Furloughed from his job at a film-production company in New Jersey in April, Fornasiero has waited more than five months for jobless benefits to arrive. He expects to be recalled to work at some point but doesn’t know when. 

“Weeks turned into months,” Fornasiero, a photographer by trade, said of the benefits delay. “I burned through what savings I had.”

Waiting game

Fornasiero is one of thousands lost in the void of the U.S. unemployment system created by the coronavirus-fueled economic crisis.


A deluge of applications — unprecedented in both speed and volume — placed enormous stress on states’ ability to process and pay claims as officials shuttered broad segments of the economy starting in March to reduce the spread of Covid-19.

More than 1 million Americans continue to file for benefits each week, between state and federal programs. Six months into the crisis, more than 26 million people continue to receive aid from week to week.

States are still processing claims at levels as high as five to six times their pre-pandemic workloads, according to a Government Accountability Office report issued Monday.

The situation has created a web of confusion, frustration and financial hardship resulting from delayed aid.

A third of Americans — equating to more than 726,000 people — had to wait more than three weeks to receive unemployment benefits after filing an application, according to Labor Department data for workers who received their first payment in July, the most recently available month for all states. (Twenty-one days is a standard measure of payment timeliness, according to economists.)

It’s a nearly fivefold increase from the 7% share in January.

Chart showing the share of workers paid within 21 days of applying for jobless benefits, U.S. total.

Some waited much longer. About 18% — nearly 400,000 people — waited at least 70 days, according to the Labor Department.

″[All states] have been overwhelmed,” said Stephen Wandner, a labor economist and senior fellow at the National Academy of Social Insurance. “But the bottom line is, this shouldn’t happen to people, not getting benefits for months and months.

“States can normally do this rapidly,” he added.

Falling through a hole

Chart showing monthly change in nonfarm payrolls through August 2020.

Holding jobs in multiple states over the past year or so has emerged as a major stumbling block for workers.

Fornasiero, for example, joined his New Jersey production company in December last year. But he’d worked at a Patagonia retail store in New York, where he lives, earlier that year. Prevailing guidance suggests workers file for benefits in the state where they’d worked, hence his application in New Jersey.

Brett Lawrence, tired of the long hours at a corporate information-technology job in New Jersey, decided to switch careers midway through 2019. He became an account manager at a Pennsylvania firm that builds trade-show exhibits.

Unemployment benefits delayed
Brett Lawrence has waited months for unemployment benefits to arrive. The delay has caused financial hardship for his family.
Brett Lawrence

But Lawrence, 35, who lives in Levittown, Pennsylvania, was laid off May 1 as business ground to a halt.

He swiftly applied for unemployment benefits in Pennsylvania. He hasn’t yet received them. Repeated calls inquiring about payment status go unanswered.

The lone time Lawrence received a call from an unemployment representative, weeks ago, he learned the state could release his funds after New Jersey’s unemployment office confirms the wages he’d earned in 2019 from his prior job.

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Pennsylvania had requested the information eight times from New Jersey, the rep told Lawrence. He’s owed more than $18,000, between state benefits and a $600 weekly federal supplement that ended in July.

“There’s a hole somewhere people are just falling through,” said Lawrence, a father of four, including a baby girl who was born Sept. 6.

Meanwhile, Lawrence’s family has relied on his wife’s income as a teacher to survive. The couple has exhausted savings, deferred two mortgage payments, racked up credit-card debt and had to ask family for financial help. 

Luckily, he found a freelance IT gig that will help financially in the short term but is pushing him back into a field he doesn’t enjoy.


“I have no other choice,” said Lawrence. “We have bills, I have four kids.”

A spokeswoman for the New Jersey Labor Department disputed that the state is delaying Lawrence’s payment and referred an inquiry about his claim to Pennsylvania. 

A spokeswoman with the Pennsylvania Department of Labor and Industry declined to provide specific details about Lawrence’s application due to privacy laws. The unemployment unit reviewed his claim information and will be reaching out to him, she said.

A wage-exchange program overseen by the National Association of State Workforce Agencies is meant to help officials more quickly verify worker wages earned in other states, Wandner said.

Chart showing share of people who got their first unemployment benefit within 21 days of applying, by state.

However, states aren’t using it and instead appear to be doing the verification mechanically when it should be automatic, said Wandner, who is a former actuary at the U.S. Labor Department.

“The system is out there,” he said. “Some states are just not using [it] and they’re not picking up all wages.

“It’s a disaster.”

A spokesperson for NASWA didn’t return a request for comment.

Costly mistakes

For some workers, benefits were delayed due to errors on the part of their employer.

Georgia, for example, adopted an emergency rule in March requiring businesses to file unemployment claims on behalf of furloughed workers.

Unemployment benefits delayed in Georgia.
Sam Thornton
Sam Thornton

Employer-filed claims generally speed up receipt of benefits since they remove the employer-verification step necessary when individuals apply, according to a spokeswoman for the state labor department.

But that wasn’t the case for Sam Thornton.

Thornton, 70, who lives in Marietta, Georgia, designs and sells residential security systems. His employer filed an unemployment claim on his behalf in late March after work dried up.


At first, things looked good — he received a mailed notice in early April saying he would get $365 a week from the state, records show. But those payments never came. Countless calls and e-mails went unanswered.

“I can’t find out what the problem is, and if there’s a problem I can’t find anything out,” Thornton said in August. “That’s been the frustrating part.

“It’s like a black hole,” he added.

He finally received $5,580 in back pay on Sept. 4 — more than five months later — after a CNBC inquiry about his claim to the Georgia Department of Labor.


As it turns out, Thornton’s employer accidentally reported that he’d earned $700 during each week he was out of work, which disqualified him from receiving benefits. His employer eventually corrected this error.

Further, the name under which the claim was filed didn’t match the name on his Social Security account. (Thornton began collecting Social Security at 62.) Officials needed to verify that Sam Thornton and Samuel M. Thornton were the same person to eliminate the possibility of fraud, he was later told.

He sent material corroborating his identity four times but never received confirmation or feedback, he said.

“The majority of our claims were employer filed claims, and they were processed and paid quickly,” according to a spokeswoman for the state labor department. She acknowledged some employers made errors that delayed aid.  

‘Deep trouble’

Any discrepancy on an application requiring human intervention will almost certainly delay benefits to a maddening degree, Wandner said.

That may occur in the appeals process, for example, if a worker or employer disputes an unemployment claim.

“If you are in the backlog, and your case is being adjudicated, you’re in deep trouble,” Wandner said.

In August, 43% of decisions in appeals cases took more than 60 days to arrive — a sharp increase from the 8% share in January, according to the U.S. Labor Department.

Claims that can’t be approved by an automated system generally have common mistakes, like providing incorrect Social Security numbers or addresses, according to the Pennsylvania labor official. More complicated issues involving wages or work history all require human intervention to review and correct, she said.

“These types of issues took time to resolve even before the record numbers of Covid-19-related claims,” she said.


Thornton is now back in line waiting for benefits. His employer recalled people to work, but Thornton is afraid of returning to clients’ homes and potentially contracting Covid-19, since his wife has a health condition that puts her at risk.

He filed an individual claim, which an unemployment representative told him would take about three to five weeks to process.

For his part, Fornasiero finally seems to have luck on his side.

He received a call from the New Jersey unemployment office on Monday, after a CNBC inquiry into his claim, saying his benefits would be released this week. In all, he’d get more than $24,000 in back pay.

He’ll use the money to catch up on bills, rebuild savings and pay about $10,000 back to his parents, small-business owners who live in Canada and who have been able to help pay his rent and food costs.

“This means a lot,” Fornasiero said. “I had completely drained my safety net so getting that back in order will be first on the list.”

He received his first installment on Thursday, for $5,200. 


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