Kentucky awards contract to replace unemployment insurance system that struggled during the pandemic

FRANKFORT, Ky. (AP) — Kentucky has awarded a long-awaited contract to replace its decades-old unemployment insurance system, which showed its shortcomings during the COVID-19 pandemic when a record surge of jobless claims resulted in processing backlogs, the state said Friday.

The state Education and Labor Cabinet reached an agreement with Deloitte Consulting this week to replace the antiquated technology for processing unemployment claims, Gov. Andy Beshear’s administration said.

The state’s six-year contract with Deloitte Consulting to develop the replacement system is for $55.5 million, cabinet spokeswoman Jill Midkiff said. The cost of the new system, including ongoing operations and maintenance expenses, will be supported by $85 million in funding approved by lawmakers, she said.

The project’s timeline will be determined in the next few months by the Office of Unemployment Insurance and Deloitte Consulting. But the state said it anticipates the new system to be fully implemented by 2028. State officials pointed to the complexities in developing the replacement system.

Once operational, the upgraded system will provide easier access for Kentuckians filing jobless claims as well as for staff members who use the system to assist people seeking employment, the state said.

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