Wyden, Warren, Probe Third-Party Vendors on Disruptions to Unemployment Benefits Putting Americans’ Livelihood at Risk

Wyden, Warren, Probe Third-Party Vendors on Disruptions to Unemployment Benefits Putting Americans' Livelihood at Risk

Senators: "Unemployment benefits are a critical bridge for millions of Americans who have lost their jobs, yet vendors' haphazard modernization of UI systems can threaten the delivery of these benefits"

Washington, D.C. - U.S. Senators Ron Wyden (D-Ore.) and Elizabeth Warren (D-Mass.) said today they are questioning giant third-party vendors Deloitte, Thomson Reuters, and Geographic Solutions with concerns they may be providing states with error-ridden, ineffective technology for their unemployment insurance systems, disrupting benefits and harming Americans.

"Unemployment benefits are a critical bridge for millions of Americans who have lost their jobs, yet vendors' haphazard modernization of UI systems can threaten the delivery of these benefits," wrote the senators.

State unemployment insurance (UI) systems across the country have been underfunded for decades and have been strained further by the Trump administration's massive cuts to the federal workforce. These burdens have left state unemployment agencies struggling to maintain outdated UI systems, leading them to turn to third-party, private-sector vendors to help update their UI infrastructure. But reports have revealed growing concern about vendors' services, which have in some cases caused severe disruptions to beneficiaries' UI.

Vendors often provide states with a one-size-fits-all system, giving them little say in its operation. They have also begun to use artificial intelligence (AI) to help determine eligibility for UI, often using tools that reportedly struggle to understand nuances in claimants' paperwork. This had led to wrongful claims of fraud, flawed benefits determinations, and benefit payments being wrongfully put on hold. For example, Thomson Reuters' fraud detection system was found in 2024 to have "needlessly deprived Americans of their public benefits."

"These disruptions leave unemployed Americans without the UI benefits they need to keep up with housing, medical, and food expenses during periods of unemployment," wrote the senators.

In 2022, Geographic Solutions experienced a cyberattack that interrupted 22 states' workforce sites, disrupting benefits for tens of thousands of Americans across the country. Deloitte, which previously contracted with California, introduced technical errors that halted payments for 300,000 people and later cost the state of Florida $15 million after their online platform crashed.

Given this troubling pattern, the senators are pressing these massive companies on their mishandling of state UI systems, the negative consequences for Americans' benefits, and the lack of thorough oversight into these contracts.

"Instead of updating UI systems, you have profited off an ineffective product-frequently at the expense of Americans' UI benefits," concluded the senators.

Text of the letters is here.