Y2K an early show in Labor data

The Labor Department has identified five entities in which employment security agencies are in danger of missing the Year 2000 deadline that occurs in January 1999 for their primary applications.

The Year 2000 problem occurs a year early for employment agencies in states, territories and possessions because their unemployment insurance systems need to project unemployment benefits information a year in advance, said Grace Kilbane, director of unemployment insurance services at Labor. By January 1999, these systems must be able to process Year 2000 date-related information.

The employment security system determines eligibility for benefits, the amount of the claim, the length of the claim and the date for compensation. It also keeps track of claimants' personal information, such as wages, job status and home address.

"It does everything," Kilbane said. "It's an economic safety net for employees who lose their jobs through no fault of their own and may be eligible to get benefit checks which can last up to 26 weeks in most states."

Of the 53 states, territories and possessions that are "working diligently" to have their systems compliant, five entities appear to be running behind, according to Labor. The Virgin Islands, Puerto Rico, Louisiana and New Mexico are "at risk" of failing to meet the January deadline, Kilbane said. Washington, D.C., is in the "high-alert" category because it is furthest behind of all the regions, she said.

Kilbane said Labor evaluated the principalities based on their own Year 2000 plans and also monitored their implementation processes quarterly to keep track of how the states are progressing.

"We are not projecting that states will fail," Kilbane said. "We're saying they have a tight implementation time for their plan."

Raj Jindal, assistant secretary of labor in Louisiana, said she was not aware that her state was on the at-risk list. According to Jindal, the components of Louisiana's system that process claims and cut checks should be fully tested by next month, with the remainder of the system finished by June 1999.

"I don't believe we will be behind in this effort," Jindal said. "This is my first time hearing that we are at risk."

Governments that are lagging may be behind schedule for various reasons, which may include losing some of their Year 2000 experts to the private sector or taking longer than expected to get bids for Year 2000 work, Kilbane said.

Diana Johnson, a spokeswoman for the Department of Employment Security in Washington, D.C., said the governments are behind because most of their computer programmers were "snapped up" by the private sector.

"It almost depleted our department," Johnson said. "We're currently getting the staff in place and trying to upgrade salaries so we can keep people. We expect our systems to work."

Each principality has contingency plans that will allow the unemployment benefits process to continue to run smoothly while officials fix their systems, Kilbane said.

In Louisiana, for example, state workers will process forms manually and work on personal computers if the mainframe fails, Jindal said.

Kilbane said some governments have backup plans to forecast benefits through December 1999, even though customers may qualify through January 2000. Holding off on forecasts that extend into 2000 - which would not work with non-compliant systems - will allow employment agencies to conduct business as usual while they fix their systems.

Kilbane said each government's contingency plan depends on its unique needs. She is not expecting there to be interruptions in paying out claims.

Labor has set aside $200 million to help states, territories and possessions pay for their Year 2000 software conversion work. The governments are expected to spend about $400 million to $500 million on Year 2000 programming and conversions, according to a recent federal survey.

Kilbane said the other 48 governments are on schedule to fix their systems.

The Michigan Unemployment Agency, for example, is the first government agency in Michigan to make its computer system Year 2000-compliant. Work took about five days this month to complete, said Jack Wheatley, acting director at the state agency.

While fixes were being made, Michigan shut down the telephone system it uses to certify claimants for jobless benefits, Wheatley said. Customers were encouraged to mail in claims during the days the system was not functioning, Wheatley said.