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The Nevada Capitol. Photo by David Calvert.

A state board has granted retroactive approval to $5.1 million in federal contracts aimed at helping the state’s unemployment insurance division deal with unprecedented growth in claims and call volume during the COVID-19 pandemic.

Members of the state’s Board of Examiners (composed of the governor, attorney general and secretary of state) voted unanimously to approve the two contracts during a brief emergency meeting on Thursday. Both contracts are paid for out of federal dollars.

The largest contract approved was a $5 million agreement with call center company Alorica, which has been operating an expanded call center for general unemployment insurance questions since April 15. The state’s Department of Employment, Training and Rehabilitation — which houses the unemployment division — announced earlier this month that Alorica would designate 100 employees at two call centers in Nevada as part of the contract.

The Alorica contract is set to run for 265 days and expires at the end of 2020. The state solicited bids from four other companies, but opted to pick Alorica “based on ability to meet the Department’s needs, price, and an agreement to hire Nevadans first.” Although the contract lists an hourly wage of $33.50 per hour with bonuses for bilingual or overtime services, a DETR spokeswoman said in an email Friday that the rate reflects the costs of services such as "facilities, management, electricity, legal fees, accounting, etc" and does not reflect the hourly wage of a call center employee.

Although the state has indicated the new third-party call center will help with the unemployment insurance division’s backlog of calls, many have continued to complain that they are unable to answer specific unemployment questions. The Las Vegas Review-Journal reported that a significant percentage of callers prematurely hung up after being told the call center did not have information on existing claims.

The board also approved a $101,000 contract — again paid for by federal dollars — with a technology company that will assess the existing software used to manage the unemployment insurance claims website with the purpose of alleviating “security bottlenecks and other areas of risk” that are a concern as processing volume increases. Work on that contract began on April 1.

Funding for state unemployment insurance administration typically comes from the federal government, and works cyclically — designed to have less funding when the economy is doing better and ramp up during recessions. But state unemployment officials warned in 2019 that projected decreases in federal funding would leave the state’s system with record low levels of staffing and unprepared for the next downturn.

More than 349,000 initial claims for unemployment have been filed in Nevada since mid-March, about the time Gov. Steve Sisolak ordered nonessential businesses to close their doors as part of a strategy to mitigate the spread of COVID-19. Already, more unemployment claims have been filed in 2020 than any other year since at least 1990.

Updated at 10:38 a.m. on Friday, April 24 to correct that the hourly wage for call center employees is not $33.50.

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