"Update on the Office of the Unemployment Compensation Ombudsman – 3rd Quarter, FY 2026"

Summary

A quarterly report in letter form dated April 1, 2026 from Virginia Employment Commission (VEC) Commissioner Melissa Smith to the Governor, the chairs of the Senate Commerce and Labor and House Labor and Commerce committees, and the Commission on Unemployment Compensation, on the Unemployment Compensation Ombudsman for the 3rd Quarter, FY 2026. It states that the Chief Customer Advocate responded to 433 emails and 351 phone calls and completed approximately 50 consultations with Legal Aid attorneys representing claimants. The letter describes a new employer tax phone support group, planning for a direct identity verification system for employers, and assistance to workers affected by layoffs. It reports triage changes to claim issue processing against the USDOL standard of resolving 80% of claim issues within 21 days, and attaches escalation trend figures by submission type and reason.

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COMMONWEALTH of VIRGINIA

Virginia Employment Commission

Melissa Smith Post Office Box 26441

Commissioner Richmond, VA 23261-6441

April 1, 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 — 3rd 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 support to Virginians seeking unemployment insurance (UJ) assistance during the
third 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,

(804) 786-3001 VRC/TDD VA Relay 711
www.vec.virginia.gov Equal Opportunity Employer/Program
understanding benefits processes, and navigating required unemployment insurance procedures.
A breakdown of the number and types of inquiries can be found in Attachment 1 to this report.

Overall, the Chief Customer Advocate received fewer inquiries in the third quarter than in the
second quarter of 2026. The Chief Customer Advocate responded directly to 433 emails and 351
phone calls from individuals who contacted the office. Inquiries from UI claimants focused on
issues such as difficulties accessing online accounts, questions about benefit eligibility or
denials, requests for assistance with back payments, appeals-related inquiries, and referrals to
supportive services like Virginia Works for reemployment services, the Virginia Department of
Labor and Industry, the Wage and Hour Division of the U.S. Department of Labor, and 2-1-1
Virginia. All inquiries received were either resolved directly, provided with the necessary
explanations, or referred to the appropriate division of VEC for further processing.

Employers contacted the agency with similar concerns, including challenges with online account
access, clarification of benefit determinations, appeals processes, unemployment tax questions,
and explanations of penalties for untimely responses. As with claimant inquiries, each employer
inquiry was resolved or addressed by way of an explanation or referral to the responsible division
of VEC. In the third quarter, to better address employer needs, a segment of VEC’s Customer
Escalation Team formed a new group within the Customer Contact Center to provide dedicated
phone support for employer tax inquiries. When employers call, they are now routed to this team
that is trained and scaled to handle the historic volume of calls VEC receives from them.

At present, employers access their VEC accounts using the Virginia Department of Taxation’s
employer authentication (or identity verification) system. When employers inquire about login
issues, they can be difficult to diagnose and resolve across agencies, often leading to delays and
employer frustration. VEC is in the late stages of planning a new direct identity verification
solution for employers, transitioning the process away from the Department of Taxation. We are
streamlining access into a single, secure login, making it easier for employers and their
representatives to access the system, for issues to be resolved quickly, and for VEC to provide
more efficient, responsive service.

Stakeholder Engagements

The Chief Customer Advocate completed approximately 50 consultations with Legal Aid
attorneys representing claimants. These meetings involved reviewing case details, providing
relevant information, and determining whether matters required referral to divisions such as
Appeals, Adjudication, Monetary Determinations, or Benefit Payment Control. Referrals were
made when issues could not be resolved directly during consultation.

Preparations are underway at VEC to provide additional support that was requested of the agency
in response to significant layoff events in the Commonwealth. In partnership with Virginia
Works, VEC assisting workers affected by the March 18, 2026 closure of the Yokohama Tire
plant in Salem, Virginia. VEC met with company leadership and union representatives to explain
claims processes, reporting requirements, and the impacts of severance, pensions, and future
employment on UI claims filed by affected workers. Additional on-site assistance from VEC
staff including the Chief Customer Advocate is scheduled for April 2026 in Roanoke,
supplemented by remote support from VEC’s Customer Escalation Team.
VEC also continued to coordinate and facilitate assistance for several employers in Central and
Southwest Virginia implementing intermittent and seasonal layoffs. VEC provided support by
educating employers and their employees on UI claims processes and responsibilities, supplying
informational resources, and collaborating with the Customer Escalation Team to provide live
assistance. This support is particularly important due to many affected workers having limited
digital literacy or difficulty accessing the Customer Contact Center by phone. Due to recurring
short-term layoffs occurring on alternating weeks, many affected workers experienced delayed
benefit payments caused by regulatory waiting periods. These delays resulted in a high volume
of inquiries. The agency engaged with employer representatives to adjust reporting practices in a
manner that complies with federal requirements and significantly reduces payment delays. Once
implemented, these changes are expected to shorten benefit processing timelines from multiple
weeks to fewer than seven days.

Chief Customer Advocate’s Recommendations

Input was provided by the Chief Customer Advocate during the process of planning for the new
VEC employer login system that was mentioned previously in this report. Recommendations
were also provided to the Office of Communications regarding employer notifications and
anticipated questions or areas for assistance as the new employer login and identity verification
system is introduced and implemented.

Based on observed patterns and feedback from claimants, the Chief Customer Advocate
recommended that VEC streamline processing of weekly claims on which claimants reported
that they worked or that they earned wages. Individuals who perform part-time or project-based
work and who report work and wages, as required, trigger wage and self-employment issue flags
on their claims. In many cases, those issue flags must be reviewed prior to payment being issued
to the claimant for the corresponding week. VEC strives to meet or exceed the USDOL standard
of resolving 80% of claim issues within 21 days. Following analysis, the Unemployment
Insurance Director and Adjudication Division implemented process changes to triage work for
more effective staff assignment of these issues delaying payment. The implemented process
changes have resulted in VEC exceeding the USDOL measure by larger margins. As a result,
claimants in these categories are now receiving payments more quickly. An analysis of a recent
two-week period showed that approximately 1,000 of the 4,500 new issues on claims benefited
from this triage process. (There can be more than one issue on a claim.)

To conclude, the activities reported here represent an important way that the VEC 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.

Sincerely, *
Melissa Smith

Commissioner
Enclosure
Attachment 1: Escalation Trends in Quarter 3, FY 2026

Figure 1: Cases by Submission Type

~

Submission Type (groups) Cases Received

Cases Closed

Avg 1st Contact
Time(Hours)

Avg. Turnaround
Time(Days)

Agency/Internal
January
February
March

Customer Web Form
January
February
March

Governor's Office
January
February
March

Legislator
January
February
March

Mass Support
January
February
March

Total

5,160
1,716
1,799
1,645
1,804
853
572
379
48

12

17

19
462
122
210
130
513
298
105
110
7,987

4,990
1,705
1,781
1,504

1,791

853
572
366
42
1
17
14
447
122
210
115
513
298
105
110
7,783

16.07
19.95
16.28
11.99

24.72
25.32
27.24
19.45

13.29

2.08
13.35

21.63

14.08
16.27
10.83
18.57

5.91
5.74
4.05

10.17

17.47

2.6
3.3
28
1.6
2.7
3.2
2.5
1.7
5.5
6.6
6.5
3.4
3.6
45
3.6
2.4
0.7
0.4
1.3
0.8
2.6

Figure 2: Cases by Reason for Escalation

252 (3%)

7g 49

121 (2%) (496) (19)

Reason for request
@BePC

@ Adjudication Related
@ General Assistance
@ Monetary
@ Employer Related
@ Initital/Weekly Claim Filing
@ Delayed Payments
@ Online Services Issue
@ Appeals Related
@issues On Claim
@ Fraud Related
@Forms & Documents
@ 83's & Backdates
@ Address or Information Update
@ Overpayment
PUA
@ Interstate claim/wages
@ PIN Related
@ Other
@ 3YR+

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