When the economic disruption from COVID-19 and the resulting shutdowns began in early 2020, Colorado’s unemployment system was so overwhelmed that it struggled to handle the flood of applications. The Colorado Department of Labor and Employment went from processing just under 100,000 initial claim s in 2019 to nearly 800,000 claims in 2020 and close to 1 million in 2021. In comparison to Colorado’s 700% spike, South Dakota experienced a nearly 500% increase in initial claims from 2019 to 2020, while California saw a 450% rise. Colorado’s sevenfold surge in the first year taxed the system so much that it resulted in claimants reporting significant delays in receiving benefits and difficulties in getting a real person on the phone to resolve problems with their claims. Even as the economy began to bounce back and the number of claims declined, complaints about the bureaucracy unemployed Coloradans must negotiate to pay their bills haven’t subsided. Frustrated claimants report reaching out to the department multiple times a day for weeks, while others lost track of how many attempts they made. This has left them frustrated, emotionally drained and without any financial aid to support themselves or their loved ones. Delays in processing claims have been linked to several factors, including high claim volumes and challenges with the labor department’s new computer system, which has led to a backlog due to difficulties with ID verification. Nearly 100 people have reached out to The Denver Post over the past few months to share their experiences and concerns about the system. Some eventually received their money while others have thrown in the towel. Complaints have been lodged with the attorney general and the governor’s office, with one individual even suing the labor department over missing unemployment benefits and another over integrity holds. Broomfield resident Misha McGinley, 53, lost her job in October 2024 and applied for unemployment right away, unaware of the trouble she was about to face. “There is no other business in this world that could function like the Colorado Department of Labor and still be in business had it not been a government agency,” she said. Even though the volume of claims the CDLE is dealing with has dropped from the highs at the beginning of the pandemic, they’ve stayed well above where they were before. “Our claim loads week over week are running somewhere around 7 to 8% higher than they were just pre-pandemic in 2019,” said Phil Spesshardt, director of CDLE’s Unemployment Insurance Division. Initial claims have remained above pre-pandemic levels, with more than 150,000 claims recorded in 2024. The exterior of 707 17th Street in Denver on March 11, 2025, where the Colorado Department of Labor and Employment has leased about 131,000 square feet in the office tower. The state agency will downsize its footprint when it moves its main office within downtown Denver later this year. (Photo by Helen H. Richardson/The Denver Post) In 2024, the department paid over $850 million in benefits and about 206,160 calls were answered. In January of this year, the unemployment call center answered about 16,175 calls, paid $73 million in benefits and the virtual agent, which helps claimants on the phone and the web, responded to more than 10,000 webchats and helped over 60,000 callers. “For context, on average we are seeing 2,000 to 4,000 initial claims, 30,000 continued claims and paying $17.5 million in benefits each week,” according to an email from CDLE sent to The Post. After a year of working as a school nurse, Penelope Eppling, 52, applied for unemployment benefits after losing her job in September 2024. Eppling waited, but the benefits never came. She received no further communication from CDLE, so she checked on her claim – it had been closed. Frustrated, she reached out to the department, only to face another challenge — getting in touch with a live person. “You call and it says that they are too busy, or like, you get the same voicemail and then you can’t leave a message, so you don’t have any person to person access,” she said. Eppling tried to get her benefits backdated but was told she had to submit an appeal. However, once she did, she never heard back. “I’ve completely lost my trust in the whole unemployment process right now,” she said. Diminishing federal funding In addition to high claim volumes and issues with a new computer system, the state labor department said it’s facing challenges because of increasingly complex fraud schemes that complicate investigations, delays in fact-finding and the loss of federal funding provided during the pandemic. Spesshardt said CDLE has over 500 employees who work within the unemployment division, with 80 workers who actually process unemployment insurance claims. “Unfortunately, the funding that we receive at a federal level continues to diminish, which makes it harder and harder to actually increase the staffing that we would have,” he said. “We look at year over year, incoming claim volume, incoming issue volume, to determine what our needs are. And so when we have the availability on funding, then what we do is we look to (increase) staff as necessary in those areas.” Spesshardt said federal regulations limit how much they can do with technology to speed up the processing of claims. The state’s January 2025 unemployment rate was 4.7%, higher than the U.S. rate of 4.0%, according to data produced by the Colorado Labor Department and the U.S. Bureau of Labor Statistics. Colorado, along with Alaska, ranked 44th out of 50 states and the District of Columbia for having a high unemployment rate, according to preliminary data from BLS. Nevada had the highest at 5.8%, with South Dakota having the lowest rate at 1.9%. Five minutes and 30 seconds Eppling, a single mother, went two months without pay. She had to tap into her retirement savings and borrow money from her mother just to help pay for basic necessities and living expenses. “I feel that it was very scary. It put a lot on me and my daughter.” By Nov. 11, 2024, Eppling had found a new job but had still not received any payment from unemployment. The following month, she received a letter letting her know she was denied benefits but was told she had $794 left to collect. She never received any money. Penelope Eppling, who lost her job in Sep. of 2024, prays at Mother Cabrini Shrine in Golden, Colorado, where she would spend time praying to find a new job before finding a new one in Nov. of 2024, as seen on Thursday, Feb. 27, 2025. (Photo by Hyoung Chang/The Denver Post) McGinley, the Broomfield resident who lost her job in October 2024, applied for unemployment right away. McGinley said she experienced a three-month delay in benefits. She reached out to the department more than 75 times during that period, all without success. Her average call time was five minutes and 30 seconds before she got disconnected. “It’s impossible to reach a live person,” she said. “When I did they said they could not tell me why it’s delayed but it’s in adjudication. They couldn’t say more and I had to be patient.” McGinley had just enough in her savings to get by but toward the end of the three months, she began to panic, fearing she would have to put her mortgage and car payment on a credit card. When she was able to speak with an unemployment representative, she was told only foreclosure or car repossession expedites claims. She explained that while neither of those situations applied, not receiving her benefits would impact her ability to make payments the following month. “They said it does not matter,” McGinley said. “They only expedite your claim if you already have lost your car or in the process of losing your car or your home.” Going through the process Unemployment insurance claims are processed by a point system. There are 225 points of eligibility that could be considered before benefits are awarded. In addition to the reasons for job loss, before a benefit is awarded, Spesshardt said the department must review all wages earned from all employers in the last 18 months to determine monetary eligibility. Unemployment benefit claims take four to six weeks to process. “As of January, roughly 70% of claims were processed within three weeks. This is an increase from 40% one year ago,” Spesshardt said. He said the improvement came from ongoing changes based on feedback from staff and claimant focus groups over the past few months. “Parties become irritated because they can’t speak to a human and they are deflected to our virtual assistant at this point in time. The virtual assistant, at this point in time, is somewhat limited in the information it can provide,” Spesshardt said. Spesshardt said the goal is to eventually modernize the virtual assistant so it can verify individuals and give them detailed information about their claims. As a result, the need for more human staff to handle claims should be reduced. Other improvements the department plans this year include hiring 25 call center agents, rolling out a Spanish version of MyUI+, text message reminders to claimants for incomplete actions, more automation where appropriate and a call center upgrade. “It’s also important for people to understand this program is funded entirely by employers in the state of Colorado,” he said. Employers pay federal unemployment taxes, which are sent to Washington D.C., and a portion is returned annually to help manage the fund and make decisions. Many people are under the impression that their regular tax dollars are covering this cost, which is not the case, according to Spesshardt. “This is an eligibility program. Right. It’s not free money, it’s not an entitlement program,” Spesshardt said. Another factor putting stress on the department is  a rise in claims from federal workers laid off because of the Department of Government Efficiency (DOGE), led by President Donald Trump’s adviser Elon Musk. Former Internal Revenue Service workers comfort each other while leaving their office after being laid off in downtown Denver on Feb. 20, 2025. (Photo by Hyoung Chang/The Denver Post) The move seeks to reduce the federal workforce to significantly cut spending and restructure government priorities. The rise in claims from laid-off federal workers has led the department to implement several measures to manage the increase, including a special queue within their call center, a dedicated federal claims team, a dedicated page on their website with several resources and on-site support for former federal workers at workforce centers statewide. There are roughly 57,000 federal workers in Colorado and Spesshardt said that of the approximately 3,000 new claims received each week, about 5% to 7% come from individuals who were laid off because of current issues in the federal government. “Who do you go to?” Forty-nine-year-old Jason Miller has been waiting for more than six weeks for the department of labor to issue his unemployment claim payments, which he filed for in early January of this year. Miller, a father of three, had previously worked as a general manager for a car dealership in Meeker, before he moved to Spokane, Wash., for a new job. However, he was let go after two months because of employee turnover and was advised to file with Colorado’s unemployment office. He described reaching out to the office as “frustrating,” “inefficient” and “disappointing.” “I have had the number on my phone ready to hit send at 7:59 watching my cell phone, because if you wait until 8:30, it’s sometimes impossible to get through to somebody,” Miller said. “There was a lot of anxiety, of like, I need to talk to somebody today because I’ve got bills due, my kids, you know, we’ve got to pay for groceries.” Related Articles Business | Thrust into unemployment, axed federal workers face relatives who celebrate their firing Business | Number of Americans filing for unemployment benefits rises to 242,000, highest level in 3 months Business | Colorado hiring ended the year on a weak note with unemployment drifting higher Business | Colorado man gets 3-year sentence for pandemic unemployment fraud Business | Colorado employment data now reliable enough to trust again, federal government says Business | National Weather Service, NOAA layoffs hit hundreds of federal workers Miller said when he was finally able to speak with a live representative, he was told that if he was at risk of eviction or vehicle repossession, his case would be prioritized. Despite sending his landlord’s eviction notice multiple times and submitting all the necessary documents, Miller said nothing was expedited. Instead, an integrity hold was placed on his account, causing further delays. As a result, Miller submitted an appeal and is still waiting for a resolution. “The frustrating thing is, who do you go to?” Miller also sought help by submitting a complaint to Colorado Attorney General Phil Weiser, while around 23 other applicants who contacted The Post reached out to the governor’s office. The governor’s office accepts calls about issues with either worker’s compensation or unemployment, according to their website. All information received is referred to CDLE. “The governor’s office works with Coloradans on a variety of issues and connects them with the resources they need to access benefits, find answers, or connect with the appropriate agencies or government offices, including supporting people who come to us with outstanding unemployment insurance claims,” said Eric Maruyama, a spokesperson for Gov. Jared Polis, in an email response to The Post when asked about the delays and concerns raised by Coloradans. Get more business news by signing up for our Economy Now newsletter. ...read more read less