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Update on the Office of the Unemployment Compensation Ombudsman - 4th Quarter, FY 2026

Summary

This is a memorandum from Melissa Smith, Commissioner, to The Honorable Abigail Davis Spanberger and other addressees, with the subject Update on the Office of the Unemployment Compensation Ombudsman - 4th Quarter, FY 2026. The Virginia Employment Commission (VEC) submits this quarterly report in the form of a letter. The Chief Customer Advocate responded directly to 432 emails and 397 phone calls. The report says the Salem, Virginia, Yokohama Tire plant closed in March, affecting approximately 600 employees, and that on May 20, 2026, the Chief Customer Advocate took the claims of the 150+ workers temporarily laid off at Vaughan-Bassett Furniture Company. It also says VEC revised its interpretation of Section 60.2-212 of the Virginia Unemployment Compensation Act, with the policy implemented in late April.

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“Update on the Office of the Unemployment Compensation Ombudsman - 4th Quarter, FY 2026.” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2026-rd437-66ef5fadad/, SHA-256 76991b2c07bae64add2af621afcd34c9240f95bad8cd11c76a39001bcc746ecc.

Full text

                                          July l , 2026


TO:   The Honorable Abigail Davis Spanberger
      Governor, Commonwealth of Virginia
      P.O. Box 1475
      Richmond, Virginia, 23218

      The Honorable R. Creigh Deeds                 The Honorable Jeion A. Ward
      Chair, Senate Commerce and Labor              Chair, House Labor and Commerce
      Senate of Virginia                            Virginia House of Delegates
      P.O. Box 396                                  P.O. Box 7310
      Richmond, Virginia 23218                      Hampton, Virginia 23666

       Members
       Commission on Unemployment Compensation

FROM: Melissa Smith, Commissioner

RE:    Update on the Office of the Unemployment Compensation Ombudsman - 4th Quarter,
       FY 2026

Dear Governor, Chairman, Madam Chair, and Members:

The Virginia Employment Commission (VEC) submits this quarterly report in the form of a letter
to provide a status update on the activities of the Unemployment Compensation Ombudsman to
the Governor, House Labor and Commerce Committee, the Senate Commerce and Labor
Committee, and the Commission on Unemployment Compensation in accordance with the
Appropriation Act- Chapter 725, Item 356 I. (Regular Session, 2025) of the Commonwealth of
Virginia.

Overview
The Ombudsman function, led by VEC's Chief Customer Advocate, continued to deliver timely
and effective suppo1t to Virginians seeking unemployment insurance (UI) assistance during the
fourth quarter of FY 2026. Through the Chief Customer Advocate, the VEC addressed a wide
range of inquiries from both UI claimants and employers about accessing online systems,
understanding benefits processes, and navigating required unemployment insurance procedures.
A breakdown of the types of inquiries can be found in Attachment l to this report.

The Chief Customer Advocate received a similar number of emails but an uptick of inquiries by
phone in the fourth quarter relative to the third quarter of FY 2026. The Chief Customer
Advocate responded directly to 432 emails and 397 phone calls, for a total of 397 unique
individuals who contacted the office. Inquiries from UI claimants focused on issues such as
access to onlinc systems, U I process explanations, general service feedback, and explaining U I
rules and regulations. All inquiries received were either resolved directly by the Chief Customer
Advocate, provided with the necessary infonnation or explanations, or referred to the appropriate
division of VEC for further processing.

This quarter, VEC prepared for the launch of the Employer Single Sign-On (ESSO), which is
decoupling VEC's employer tax accounts from the Department of Taxation's iFile website. This
change is being made to enhance security, streamline access for employers, and allow multi-user
flexibility. The Chief Customer Advocate provided guidance to VEC's tax division during this
process and has been available to communicate any questions or concerns relayed from
employers. That feedback has allowed VEC to anticipate employer needs and proactively address
them via a robust FAQ section on VEC's website. As VEC prepares for the change to become
effective August 1, 2026, the Chief Customer Advocate is available to employers to answer
questions and provide assistance as needed.

Stakeholder Engagements
The Chief Customer Advocate completed approximately 36 consultations with Legal Aid
attorneys representing claimants. Through these meetings, the Chief Customer Advocate was
able to answer questions, address concerns, and refer claims issues to the proper place for
resolution.

The Chief Customer Advocate also provided in-person assistance to two major employers in
Central and Western Virginia. The Salem, Virginia, Yokohama Tire plant permanently closed its
doors in March, which affected approximately 600 employees. As reported last quarter, the Chief
Customer Advocate worked with the employer's HR department and the Union representatives in
preparation for the mass layoff event. The Chief Customer Advocate assisted the employer with
accessing and navigating their online portal and advised on how to provide the necessary
separation information to the VEC for every employee who went on to file a claim for
benefits. The Chief Customer Advocate then coordinated with various VEC benefits departments
to provide separation infonnation ahead of the layoffs to minimize wait times for the affected
Yokohama employees. The Chief Customer Advocate had several meetings with the local Union
and their members and provided basic claims information and tips on how to file their claims and
what to do after filing them. Along with a member of the VEC Escalation Team, the Chief
Customer Advocate traveled to Roanoke for a claims-filing event in early April where they
directly assisted workers and answered any questions.

The Chief Customer Advocate also traveled to the Vaughan-Bassett Furniture Company's factory
on May 20, 2026, to personally take the claims of the 150+ workerswho were temporarily laid
off. These workers have historically been unable to file their own claims due to lack of Internet
access, inexperience with online systems, and difficulties reaching VEC's Customer Contact
Center. The Chief Customer Advocate coordinated directly with Vaughan-Bassett to receive the
necessary employer-side information so VEC could process the claims immediately, thus
reducing payment wait times for affected workers.

Chief Customer Advocate's Recommendations
Insights from the Chief Customer Advocate informed the agency's policy process when it
recently revised its interpretation of Section 60.2-212 of the Virginia Unemployment
Compensation Act. Historically, VEC held any claimant with an LLC/Corporation registered

                                                                                                2
with the State Corporation Commission as being "not unemployed" notwithstanding the number
of hours, if any, the claimant was devoting to the business. As a result, these claimants were
found ineligible for UL Affected claimants and their attorneys reached out to the Chief Customer
Advocate when VEC issued decisions that explained that their LLC or other business registration
was preventing them from obtaining the UI benefits they sought. Recognizing that many
registered entities are created solely for limited, part-time, non-business, or seasonal purposes by
individuals who may work two or more jobs, and in light of recent court decisions, VEC
revisited this policy.

To determine eligibility under the revised policy, VEC considers factors like the claimant's
current and future plans for engagement with the registered entity as a potential business or
means of employment and whether they continue to seek full-time employment. Since
implementation of the policy in late April, the Chief Customer Advocate has worked with
various VEC business units to clarify and understand application of the policy and to rep011 the
positive impacts of the change.

To conclude, the activities reported here represent an important way that the VEC 's Ombudsman
function works to ensure that Virginia's Unemployment Insurance program and benefits can be
accessed and understood by all. Please do not hesitate to contact me at
Melissa.Smith@vec.virginia.gov with any questions.




                                      Melissa Smith
                                      Commissioner

Enclosure




                                                                                                   3
Attachment 1: Escalation Trends in Quarter 4, FY 2026

Figure 1: Cases by Submission Type
                             Cases Received      Cases Closed Avg 1st Contact          Avg. Turnaround
                                                                Time{Hours)            Time(Days)
 B Agency/Internal                      4,534          4.301                   ua                   3.2
     April                              1,616           1,592                  7.67                 3.7
    May                                  1,508          1,484                  5.06                 3.5
    June                                1,410           1,225                  6.66                 2.2
 a Customer Web Form                       696            692                 14.86                 1.4
     April                                 359            355                  11.55                u
    May                                    288            288                  15.00                1.3
    June                                    49             49                 29.79                 2.4
 e Employer                                267            247                 2037                  1.3
    June                                   267            247                 20.37                 1.3
 e Ciovemof's Offlc:e                       47             47                 18.94                 4.0
     April                                  12             12                  12.80                3.3
    May                                     33             33                 21.73                 4.5
    June                                     2              2                                       0.0
 g Leglslatof                              174            156                 10.95                 3.3
     April                                  91             91                  8.90                 3.7
      May                                   38             32                 15.30                 3.6
      June                                  45             33                 11.76                 2.0
 Ill Mass SUpport                           29             27                  7.43                 0.3
     April                                  24            22                  12.50                 0.0
     May                                     3             3                   1.00                 2.0
     June                                    2             2                   0.00                 0.5
 ia VA Worb Employee                        21            20                  12.71                 1.7
     April                                   8             8                  15.86                 2.3
    May                                      4             4                   2.33                 2.3
    June                                     9             8                  14.00                 0.8
   Total                                5,768           5,490                  8.01                 2.9




Figure 2: Cases by Reason for Escalation
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