Lawmakers must wait until January if they wish to fix a botched effort to raise unemployment benefits.

They should have slowed down and taken more care last spring when creating the benefits program that was later rejected by the feds, Labor Commissioner Michael Harrington said Tuesday.

"The legislature moved extremely quickly on this," Harrington said at a legislative hearing. "It was all based on theory, and not fact. No due diligence was taken to make sure the law that resulted actually conformed with the federal requirements."

Vermont’s legislative leaders have asked the U.S. Department of Labor to reconsider a decision that blocks a $25 increase for about 4,000 Vermonters who are receiving unemployment insurance. Vermont lawmakers last spring tucked the additional benefit into state legislation related to the unemployment insurance trust fund, the source of benefits for out-of-work Vermonters.

Federal labor officials later ruled that the Vermont Department of Labor didn’t have to follow lawmakers’ intent to award the extra money. On Tuesday, Harrington said the only way to make the money available is to rewrite the law in the coming session.

“The plain text language in the bill, and our interpretation of that language, clearly identifies it as a supplemental benefit, which it was intended to be,” Harrington said. He spoke after a hearing Tuesday of the Senate Economic Development, Housing and General Affairs Committee.

“Because of that intent and because the U.S. Department of Labor is clear that that is not permissible, there will have to be some legislative solution offered," he said.

Last week, five top lawmakers wrote to Jim Garner, administrator of the federal labor department's Office of Unemployment Insurance, asking him to reconsider his rejection of the payments. The blockage is linked to a matter of interpretation said the lawmakers, including Senate President Pro Tempore Becca Balint (D-Windham) and House Speaker Jill Krowinski (D-Burlington).

“Whatever mechanism would lead to allowing the benefit to be paid with trust fund dollars was what the legislature wanted,” the letter said. “If we had been informed during the bill's markup that the benefit could not go forward with trust fund dollars, we would have clarified the legislation.”

The Vermont Department of Labor had assured Vermont lawmakers in negotiations that the most efficient way to increase benefits to Vermonters was to add a flat $25 per week for each recipient, the letter said.

But the state's labor department told lawmakers August 24 that it was impossible to add the money from the unemployment trust fund because the benefit was supplemental, and didn’t meet the federal unemployment insurance program requirements, as intended under the new law, Act 51.

The matter of the missing $25 payment, which was due to start in early September, has galvanized lawmakers who want to help unemployed Vermonters. They sharply criticized Harrington for failing to notify them sooner that federal officials had decided the payments could not go forward.

Sen. Michael Sirotkin (D-Chittenden), chairman of the Economic Development Committee, told Harrington Tuesday that the committee might have been able to address the matter in the legislature’s veto session in June had Harrington  informed them earlier that the feds were questioning it.

“Now you’ve put us in a position where we’re locked out of doing anything,” Sirotkin said.

Harrington said that he let lawmakers know as soon as he was sure the program couldn't be implemented. Although he heard in June that it would likely be rejected, he said he had learned in working with the federal agency that informal decisions often change. And he apologized for waiting so long.

“We had been hoping to actually have a formal determination that we could present to the legislature,” he said. “Hindsight being what it is, if I could go back and do it, I would have included the legislature much earlier on.”

Nevertheless, Sirotkin said he questioned Harrington’s commitment to working with lawmakers.

“Process-wise, not discussing it with us sort of feels like a disrespect for the legislature in my mind, and in a lot of other legislators’ minds,” he said.
The difficulty in adding the money to checks is linked to the condition of  the department's aging mainframe computer. A bipartisan committee has been working on a plan to upgrade the decades-old technology, which has been blamed for delays and communication problems during the first year of the pandemic, when thousands of Vermonters lost their jobs.

Harrington told lawmakers last winter that programming an unfamiliar task into the obsolete system could endanger the smooth issuance of payments. Creating the supplemental benefit was intended as a work-around.

Sirotkin wants independent corroboration of what can and cannot be changed as a result of the mainframe’s age.

“We keep coming up against this thing that we can’t change policy because the mainframe is going to crash,” he said Tuesday. “You may very well be right, but I’d like somebody independent to talk to your experts, and maybe they have a better idea.”

Harrington had his own sharp rebuttal for the lawmakers Tuesday, saying  that lawmakers who questioned his willingness to work with elected officials had criticized his work and that of the department in a pointed and personal manner.

“I know your words speak to seeking a partnership, but I will be very honest with you: Your actions do not follow your words,” he said, speaking directly to committee member Sen. Kesha Ram Hinsdale (D-Chittenden). She has questioned whether Harrington is taking claimants' needs into account, and asked him during the hearing to apologize to those who didn't get the money they needed. “I don't feel as though you have any intent on developing a partnership with the Department of Labor, or the administration.”

Later he said the criticism did not take into account the successful work that hundreds of the department's workers did in the pandemic to get money  to Vermonters who had lost their jobs.

“To assign intent where there really wasn’t any is not fair to me or to the team that has been working on this,” he said.