Thousands of unemployment claims remain locked by the state

Rebecca and daughter
PUA CLAIM DENIED: Rebecca Towne and her daughter.

When Rebecca Towne was laid off April 15 from her job as a tax preparer for Jackson Hewitt, she figured she would find another job. Like many Arkansans, she’d never drawn unemployment in her life and didn’t plan to start then.

But Towne, 51, couldn’t find work anywhere in Marion County that spring, as businesses closed their doors and laid off workers in response to the coronavirus pandemic. By July, she was borrowing money from her adult daughter to feed herself and her youngest daughter. She filed for Pandemic Unemployment Assistance, or PUA, the first week of July. Towne said she was told she would be able to backdate her claims going back to April 16, meaning she’d get $600 from the federal government and a maximum of $132 from the state for each week she was without work.

As of October, Towne had received a grand total of just $780 in benefits, for two weeks in August. (By that point, the weekly federal bonus payments had decreased from $600 to $300.) Her claims for April, May, June and July were denied by the Arkansas Division of Workforce Services. After repeated phone calls, she’s still unsure why.

“You guys say I qualify, you say I’m going to be able to get help, and then you deny everything,” Towne said in a phone interview.

In August, she resumed working as a paraprofessional at a nearby school, and she now brings home under $1,100 monthly from the job — not enough to cover rent, bills and groceries.

As of Oct. 13, DWS had received almost 238,000 applications for PUA, the program established by the federal government this spring to assist independent contractors, gig workers, the self-employed and others who lost work due to the COVID-19 crisis. Many such workers do not qualify for regular unemployment insurance, which is designed for workers classified as employees. The PUA program, which was created by Congress as part of the CARES Act, has provided an economic lifeline for tens of thousands of households in Arkansas.

Yet over 54,000 of those PUA claims had been flagged for internal review by Arkansas DWS as of Oct. 13, according to spokeswoman Zoë Calkins. That number is almost a quarter of the total, and twice as many as the agency said were under review on Aug. 4. A flagged claim remains frozen until the review is complete, which can leave applicants in limbo for weeks or months.

DWS has had to develop new processes and policies to investigate suspected fraud in the PUA system, Calkins said. The regular unemployment insurance system is funded largely by payroll taxes collected from employers, so workforce services agencies usually turn to employers for help when investigating suspected fraud. In contrast, a PUA claim filed by an independent contractor or self-employed person does not involve an employer. A PUA applicant must self-certify that he or she lost work due to the pandemic and provide proof of income, such as last year’s tax return and recent invoices.

Calkins said DWS began using “algorithms” over the summer to help identify suspicious PUA claims that require further investigation. But she declined to provide details about where the algorithms originated, saying only that they were developed through “a combined effort coordinated across internal and external entities.”

Calkins said in an email that DWS does not keep track of how many flagged claims have been confirmed to be fraudulent or how many have been cleared and released since the program began in May. When asked what type of situations might result in a claim being flagged, Calkins said the agency is “not sharing this information for security purposes.”


Arkansas’s experience with PUA has been troubled from the beginning. The state was slower to roll out the program than many others, in part because its computer system for processing regular unemployment claims lacked the capacity to handle the new program. It hired a vendor, Protech Solutions of Little Rock, to build a new system for PUA from scratch in April.

Arkansans started filing PUA claims on May 1, but a glitch caused some 5,700 applicants’ documents to be lost the first week the system was online. Then, on May 15, the Arkansas Times published a story calling attention to a security flaw in the new web portal that left thousands of applicants’ personal information exposed, including Social Security numbers and bank account numbers. The Times was notified of the vulnerability by an out-of-work software programmer who was applying for assistance. DWS was forced to take the website offline for several days to repair the problem.

Protech Solutions is now the subject of a class action lawsuit by PUA applicants who say the company’s negligence exposed them to possible identity theft and delayed their receipt of benefits. A DWS official told the state legislature in September it had found no evidence of fraud connected to the incident, though an FBI investigation is ongoing.

But identity theft has now become a problem for PUA systems across the country, with scammers submitting millions of applications using others’ personal information. California was so overwhelmed with fraudulent claims that it recently stopped accepting new applications for two weeks. In Arkansas, Governor Hutchinson received a letter this summer notifying him he had applied for assistance, as did Rep. Fred Love (D-Little Rock), the minority leader in the state House of Representatives.

As DWS attempts to weed out fake claims, however, thousands of real Arkansans have been left stranded.

Bryce Youngblood, 26, of Horatio, said he typically made $1,400 a week on contract as an industrial welder before the pandemic began. The company he worked for shut its doors in March, he said, but soon after he applied for PUA, his account was placed under review by DWS. After months of making calls and leaving unreturned messages, Youngblood said, he has gotten no help from the state. He’s had to sell his truck and move in with his brother while he scrapes by on odd jobs.

“I still have yet to receive anything,” he said in a phone interview. “And I have already lost every single thing I had.”

FLAGGED: Robyn Socarro’s unemployment claim was locked for months because of a misunderstanding about whether she should file in Arkansas or Missouri. Photo by Kat Wilson.

Robyn Socarro, 47, runs a dog-walking service in Benton County and lives just across the state line in Pineville, Mo. Her business plummeted in March and April as her clients began working from home, cutting back on expenses and taking safety precautions. In those early months of the pandemic, it was unclear whether dogs could spread the novel coronavirus. (Canine infections are now thought to be extremely rare.)

Socarro applied for PUA in May and initially received several weeks of backdated payments. But in mid-June, the money stopped without explanation and her PUA account was locked for review. For the next three weeks, she said, she called DWS almost daily in search of answers.

“They threw out the baby with the bathwater,” she said, referring to the state’s fraud prevention efforts. “There were thousands of people, and it was just, poof, too bad for you, we’re not telling you squat. Y’all figure out for yourself how you’re gonna live. I can understand having some problems, but I don’t understand their lack of communication.”

By mid-July, she’d given up on PUA and was piecing together cleaning and dog-sitting gigs as best she could. Then, unexpectedly, Socarro received a call from a woman at DWS who demanded to know why she’d applied for unemployment in Arkansas when she lived in Missouri. Socarro explained that she earned all of her income in Arkansas and filed her taxes in Arkansas. In fact, she said, she initially tried to apply for unemployment in Missouri but the state’s workforce services system had steered her to the Arkansas system instead.

The DWS worker accepted the explanation — but did not unlock her account. Instead, Socarro said, she was told to wait for another call. Another month passed before she received an email asking for her previous year’s tax return and other financial information, which she provided. At last, a letter arrived from DWS telling her to show up in person at a workforce services office and verify her identity.

In September, Socarro finally received her PUA money for June. It all went toward paying off the credit card debt she accrued while she was out of work, she said. She’s now working a janitorial job and is trying to rebuild her dog-walking business. Though she thinks she’s still owed partial payments for July, she’s not going to press the issue.

“Just forget it. I can just eat more beans right now,” she said. “And I’m one of the lucky ones.” She knows many people, she said, who abandoned their claims after endless hours of trying and failing to reach anyone at DWS.

Calkins, the DWS spokeswoman, declined to say whether an out-of-state home address might result in a claim being flagged by the agency, citing security concerns.

“There’s a number of reasons an account can be flagged, and we don’t call them fraudulent claims until a full, due-process investigation has been done,” she said in a phone call.

Applicants with locked PUA claims should be able to unlock their accounts once they receive a letter in the mail instructing them to verify their ID in person at a workforce center, Calkins said. Since July, the agency has trained 100 additional staff statewide to handle identity verification for locked claims, and it held seven “PUA Authentication events” in August in an attempt to resolve issues for large numbers of people. DWS has doubled the number of staff assigned to handle in-person and telephone inquiries about both PUA and regular unemployment since March.

DENIED ASSISTANCE: Since Rebecca Towne’s job ended April 15, she has struggled to make ends meet for herself and her daughter, Nikki. The state has offered little help. Photo by Matt White.

Meanwhile, Rebecca Towne is still waiting for answers about why her appeal was denied. She said she’s received conflicting explanations from DWS.

One worker told her the problem was that her tax prep job was seasonal and the April 15 layoff had been scheduled in advance. Later, she was told that she shouldn’t have chosen “other” on a question asking applicants to select a reason why they were applying for PUA. She’s tried to challenge the denial but has been told the appeals process is at a standstill due to a backlog at the Arkansas Appeal Tribunal.

“I can’t even get anyone to help try to fix it,” Towne said. “I’ve been so lost and confused.”

“I think they’re doing all of this so they don’t have to pay this money out,” she said. “I know people in other states who were laid off who had no problem, and all I’ve done is jump through hoops for months.”  

This reporting is courtesy of the Arkansas Nonprofit News Network, an independent, nonpartisan news project dedicated to producing journalism that matters to Arkansans.

The Arkansas Nonprofit News Network is an independent, nonpartisan news organization dedicated to producing journalism that matters to Arkansans. Our work is re-published by partner newsrooms across the state.