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FRANKFORT, Ky. (May 24, 2024) – Today, Gov. Andy Beshear announced that a contract to replace the commonwealth’s antiquated Unemployment Insurance (UI) system has been awarded.
This week, the Education and Labor Cabinet 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,” said Gov. Beshear. “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The limitations of the outdated system were compounded by the previous administration’s 2017 closure of more than 30 of the state’s 51 regional career centers, which provided job training and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.
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.
Additional staff reductions and budget cuts implemented prior to the Beshear administration also reduced UI staff by 95 employees and cut the budget for the Office of Unemployment Insurance by $16 million. 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.
While a modern system is needed to serve Kentuckians, Gov. Beshear has secured record-breaking economic growth during his tenure.
Since the beginning of his administration, Gov. Beshear has announced more than 1,000 private-sector new-location and expansion projects totaling over $30.6 billion in announced investments, creating more than 52,700 jobs. This is the highest investment figure secured during the tenure of any governor in the commonwealth’s history.
The robust job creation has been accompanied by rising wages across the commonwealth. The average incentivized hourly wage in 2022 and 2023 topped $26 in consecutive years for the first time.
The Governor’s administration also secured the most jobs filled in state history, and last year, set the state record for the longest period with the lowest unemployment rates in state history.
Follow the Kentucky Education and Labor Cabinet on Facebook and Twitter for all the latest updates.
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