Transforming Legacy Unemployment Insurance Systems: Empowering Claimants with Enhanced User Experience

Unemployment Insurance (UI) benefits is the money a state pays its unemployed citizens, called claimants. Claimants get UI benefits if they meet certain eligibility requirements and are unemployed due to no fault of their own. For example, workers who lost their job when their former employer ceased operations may be eligible for UI benefits from the state.

Given the importance of UI benefits, the claimant experience is critical. However, filing a UI claim can be a frustrating experience, requiring claimants to make several attempts without a guarantee of success. According to an analysis, only 27% of unemployed citizens got benefits after the Covid-19 pandemic compared to 41% who got them after the 2009 recession.

Digital transformation of legacy UI systems is not only the need of the hour but also critical to the success of the benefits program. This blog explains the challenges of legacy UI systems and how modern technologies can transform the claims process and claimant experience.

Legacy Unemployment Insurance Systems

The UI claims systems in at least twelve US states run on COBOL, a programming language that is over 60 years old. These systems were unable to bear the load of claims during the Covid-19 pandemic. While some states have outsourced their COBOL system maintenance to IT vendors, others rely on staff programmers; both have their shortcomings.

According to the US Government Accountability Office (GAO), legacy systems such as these are expensive to maintain, vulnerable to cyberattacks, and can easily break down during periods of high claim volume. The hidden cost of legacy software maintenance is over $337 million per year in taxpayer money.

Legacy does not necessarily mean old; it could be a new software running on old hardware that does little to reap its full potential. It could also be a modern system that fails to meet the critical goals which, in this case, are seamless UI claims administration and a great claimant experience.

Before we explore the ways to modernize legacy systems, let us understand the challenges of legacy UI systems with respect to operations and claims administration.

Challenges and Risks of Using Legacy Systems in Unemployment Insurance Claims Administration

State workforce agencies face the following challenges while using legacy UI systems:

  • The skillsets to support many older programming languages are in very short supply.
  • Some systems reside on expensive and vulnerable in-house mainframe systems.
  • The cost of infrastructure maintenance and insurance is much higher than with state-of-the-art systems.
  • These systems cannot be scaled during peak demand.
  • Outdated security systems are vulnerable to black hat hacking.

These challenges are primarily operational but raise challenges for claimants at crucial times. For example, a state’s unemployment insurance system crashed under the weight of thousands of applications during the pandemic. It was found that the state had ignored several reports about the system’s underperformance. This forced claimants to use an outdated version of MS Explorer for claim filing before switching to the tedious paper application. By April 2020, only 6% of eligible claimants had received UI benefit payments.

Best Practices for Upgrading Legacy Unemployment Insurance Systems

With a full new modernized UI system (Tax, Benefits, Appeals, Workforce, and Call Center) comes an intuitive and fast user-friendly interface. This reduces the time claimants and employers spend completing and submitting required forms, enhancing their experience.

However, every legacy system is unique and there is no single and universal modernization plan. The modernization strategy depends on the end goal which is an exceptional customer experience. These six best practices will help guide the modernization initiative:

Setting the Goal

Examine the state workforce agency and claimant challenges and requirements and identify a suitable system based on agility, flexibility, scalability, and technology. Here are a few examples of agency goals:

  • Lower claim filling and processing times.
  • Automation of claims vetting, processing, and approval.
  • Fast and interconnected systems that seamlessly communicate with each other.
  • Scalability and agility of the UI system to handle high claim volumes easily.
  • Reduce the budget used for managing the legacy system and use that money to create a better customer experience.

Due Diligence

Once you define the objectives, consider cloud-native systems such as Infosys LaborForce to fulfil those needs. The solution transforms the existing process to a truly digital system with self-contained modules for tax , benefits, appeals, workforce, and call center. It also enables agencies to leverage Artificial Intelligence (AI) and Machine Learning capabilities to combat fraud and to predict any spike in claim volumes and prepare proactively.

Greater Automation

By automating the initial claims review and workflows, the agency will put less burden on the customer care staff. It will streamline the process with regular updates to the claimant through email or text messages thus improving the experience.

The lower burden on the customer care team will let them handle complex problems that require human intervention and give better service to the claimant. Multi-lingual, device-agnostic, and human-centric systems will keep the focus on the claimant experience as it rapidly scales up during a crisis.

Document the Process

Over time the staff or management in the agency is likely to change. You need excellent documentation to ensure that a new resource person can easily catch up with the migration details in the future. A UI system with a built-in content management system will help the customer care team quickly retrieve records as they serve their customers.

Handle Internal Disruption

Implementation of a new UI system could either be delivered in a phased or a singular release approach. During this time, the agency must test it on a mock environment and ensure no disruptions in the end-user experience as the system goes live.

Challenges of Upgrading Legacy Unemployment Insurance Systems

Upgrading legacy systems has numerous direct and indirect benefits, such as:

  • 13% reduction in operational costs.
  • 40% boost in the productivity of the staff.
  • Improved customer experience

However, UI system modernization also comes with several challenges, which you can overcome with a strategic plan and cloud-native UI systems. This allows agencies to minimize investment in hardware, software, and human resources. These systems work off-site and provide best-in-class hardware and software with an expert team.

Hardware and Software Integration

A full upgrade is a combination of software and hardware. For many state agencies, doing this and maintaining the system in-house is expensive and challenging because of the lack of skilled resources. Because of this, many agencies end up installing new applications on outdated hardware, not reaching full integration. A cloud-native solution saves agencies from worrying about both these aspects. The solution ensures that both the hardware and software run on latest technologies, offers pre-built APIs to quickly integrate with different systems, and focuses on configuration over customization to deliver superior staff experience and ensure future resilience.

Disrupted performance

During emergencies, such as the Covid-19 pandemic, the state workforce agency cannot afford system downtime. Disruption in system performance leads to more expenditures on staff to handle disgruntled customers and to take and process applications manually. A cloud-native application ensures seamless, automated upgrades and scales to meet increasing caseloads, ensuring no adverse impact on claimant experience.

Data Loss

Migrating data from the legacy to the modern system often leads to lost entries and duplicate records, leaving the migration team scrambling to roll back. With a cloud-native solution, agencies can define a comprehensive migration plan with contingencies for backup and an action plan in case of failure.

Stakeholder Buy-In

Stakeholders could be the employees that use the system and management that is accustomed to the legacy system. People often resist change - learning new ways of working, technologies, and skills. For best results, management needs to start with a communication plan to secure stakeholder buy-in. The agency must have an organizational change management plan that aims to build the new system and processes into the culture.

Financial Investment

Legacy systems are upgraded in phases, with teams continuously working on development, testing, and maintenance. If you plan an in-house upgrade, focus on migrating the key processes that immediately impact the cost savings and user experience. A cloud-native solution that delivers loosely coupled modules for different program areas can simplify implementation and ensure the desired return on investment.


Migration from legacy to modern unemployment insurance systems is the need of the hour for many state workforce agencies. It will eliminate what you spend on maintaining legacy systems and bring in efficiency and a better customer experience when constituents file for UI claims. Cloud-native technology is evolving rapidly, and it is imperative that state workforce agencies reap its benefits to improve claimant experience and overall UI system performance.

To help agencies take advantage of cloud, we have collaborated with Salesforce to develop Infosys LaborForce, industry’s first fully-integrated cloud-native UI system built on the Salesforce platform. This makes it a truly digital, scalable, and resilient system that delivers an excellent customer experience. The low-code development platform prioritizes configuration over new development, helping you build apps quickly for desktop and mobile devices. Infosys LaborForce leverages AI and ML technologies to detect, combat, and predict fraudulent UI claims.

The underlying Salesforce platform provides cutting-edge security against cyberattacks and data compromise, safeguarding customer information.

Read how Infosys LaborForce can help you manage increasing caseload, evolving policies, and service expectations while substantially reducing turnaround times.

Related Reading:

Author Details

Stephanie Puryear, Principal Consultant – National Labor Practice, Infosys Public Services
Stephanie Puryear

Stephanie has 20 years of experience helping Labor and Workforce Departments administer Unemployment Insurance (UI) programs effectively. She has delivered UI solutions in 5 states and is the Manager for Business Analysis and the UI PMO for LaborForce. Stephanie has designed highly user-friend systems and is expert on helping agencies fight UI fraud.