The Department of Labor (DoL) recently announced plans to partner with state agencies to strengthen the nationwide unemployment insurance (UI) system, “with a focus on how modern technology and digital practices can make state systems more accessible, resilient, and secure.”
The new program, called the Open UI Initiative, aims to change how states build and buy technology that runs their UI systems, the DoL website says. The agency said fruits of the effort may start to emerge before the end of this year.
According to the press release, the initiative will establish a common framework and approach for modular UI system development, create market-based incentives that drive innovation, and provide more choices for states in terms of how they invest in technology to meet the goals of the UI program.
“This will include efforts to foster an ecosystem of open and modular solutions that supports the Department’s strategy of enabling more flexible and resilient IT systems, while driving efficiencies in software development and acquisition, and creating new opportunities for states and vendors to collaborate on solutions,” the agency said.
The DoL outlined its strategy for UI modernization in May 2023, which focuses on helping states adopt a continual approach to modernization of the UI programs launched as part of the American Rescue Plan Act.
At the core of the strategy is an understanding that technology is never finished and that systems need to evolve to meet changing needs, the agency said. The strategy points to UI systems typically being procured and managed as monoliths, which makes it difficult for states to adapt systems quickly and leverage emerging technologies.
“This ‘all or nothing’ paradigm also forces states into a choice between maintaining their legacy technology far longer than they would like or embarking on an expensive and risky system overhaul that often either fails to deliver desired results or delivers short-lived results that require repeating the overhaul process a few years later,” DoL said.
Last fall, the department also said it would award more than $200 million to improve state UI systems. That money is supposed to help states segment their UI systems into “smaller components” that can more easily be replaced.
Next steps for the new Open UI Initiative include the creation of a technical advisory group by the UI Information Technology Support Center (UI ITSC) – a body held under the National Association of State Workforce Agencies that’s also assisting the DoL. Once that group has formed an “Open UI framework,” the UI ITSC will begin helping states and vendors source software. Georgetown University’s Beeck Center for Social Impact and Innovation is also involved in the effort.
DoL said that early adopters will start to contribute to, or use, the emerging solutions before the end of 2024.
“This collaborative and open approach to modernization will not only help strengthen the UI system but also provide lessons for other federal-state programs like Medicaid, Supplemental Nutrition Assistance Programs (SNAP), and Temporary Assistance for Needy Families (TANF),” the agency said. “While ‘one size fits all’ solutions or ‘quick fixes’ for these programs are not the answer, the federal government can help set direction for complex ecosystems like unemployment insurance and implement strategies that are inclusive of their many actors – including states, vendors, and claimant advocates – to drive transformative change over time.”
