Kentucky's Unemployment Insurance system to be replaced with modern platform

Replace Kentucky’s decades-old UI system

FRANKFORT, Ky. (KT) – Gov. Andy Beshear announced on Friday a contract to replace the state’s antiquated Unemployment Insurance (UI) system, which caused so many problems in processing claims issues during COVID-19 pandemic.

The Education and Labor Cabinet has entered into an agreement with Deloitte Consulting to replace Kentucky’s decades-old UI system with a modern and integrated platform that will provide easier access for UI claimants, as well as employers and the staff who use the system daily, to provide assistance to Kentuckians seeking employment.

“As Governor, I’m committed to making life in Kentucky better in every way. This means building the bright future we have all dreamed of, as well as ensuring our state’s safeguards are equipped for any challenge that lies ahead,” Beshear said. “This new system will help us better meet the needs of Kentuckians by improving accessibility and claims processing times, as well as safeguarding against potential unemployment insurance fraud.”

The Education and Labor Cabinet’s Office of Unemployment Insurance and Deloitte Consulting will now begin a 90-to-120-day planning process to determine the timeline of the project with full implementation anticipated by 2028.

Solicitation for a new UI system was initiated by the Beshear administration when the existing system – which was implemented almost 40 years ago – proved severely inadequate to handle the historic demand for benefits experienced in Kentucky and across the nation at the height of the pandemic.

The limitations of the outdated system were compounded by the previous administration’s 2017 closure of more than 30 of the state’s 51 regional career centers, which provided job training and in-person assistance for unemployment insurance claimants. UI staff was also cut by 95 people.

Additionally, the previous administration removed in-person unemployment services from the remaining career centers, forcing people to drive longer distances to the few remaining regional offices or to contact the Frankfort call center, which had only 12 employees at the onset of the pandemic.

These cuts, coupled with an unprecedented 1,300% increase in UI claims due to the once-a-century global pandemic, meant that many Kentuckians experienced significant delays in receiving UI benefit payments.

The state’s six-year contract with Deloitte Consulting was finalized after an earlier Request for Proposals was canceled in 2021 following a widespread cyberattack on state UI systems across the country. A second solicitation was canceled in 2022 after the selected vendor failed to sign and return the contract.