Deputy named to lead Kansas’ COVID-19-stressed labor agency

Story updated at 6:31 p.m. Tuesday:

TOPEKA — Gov. Laura Kelly on Tuesday named the Kansas Department of Labor’s deputy secretary as its top administrator as she works to find a permanent leader for the agency, which struggled for months to process a surge in claims from workers left unemployed by the coronavirus pandemic.

New Acting Secretary Brett Flachsbarth is the third person to lead the Department of Labor in less than seven months. Kelly’s first labor secretary, Delía García, resigned in June amid problems with the system for distributing unemployment benefits. Her replacement, Acting Secretary Ryan Wright, was allowed by law to serve only six months, and that period ended Tuesday.

The Democratic governor credited Wright with improving the Department of Labor’s operations. She said he made “significant progress” in building a system to handle the Pandemic Unemployment Assistance program in Kansas. Congress created that program to provide jobless benefits to independent contractors and other workers who normally don’t receive them.

But a top Republican in the GOP-controlled Legislature said the department continues to struggle and he’s still getting complaints from constituents about their benefits being delayed.

“I don’t know that it improves anything or weakens anything,” incoming Senate Majority Leader Gene Suellentrop, a Wichita Republican, said of Flachsbarth’s appointment.

Kelly said during a Statehouse news conference that she hopes to name a permanent secretary “in the next couple of weeks.” That appointment would require Kansas Senate confirmation, whereas an acting secretary’s appointment does not.

The changes at the Department of Labor come as the state continues to see hundreds of new confirmed and probable coronavirus cases a day. Kansas has reported more than 204,000 cases since the pandemic reached the state in early March, or one for every 14 of its 2.9 million residents.

The state’s economy has weakened again recently, with a rise in new initial claims for regular unemployment benefits in recent weeks. The state’s unemployment rate jumped to 5.6% in November from 5% in October, after dropping steadily from a 11.9% peak in April, when a statewide stay-at-home order issued by Kelly was in effect.

The Department of Labor acknowledged that it had a backlog of 25,000 regular unemployment claims in June, but spokesman Jerry Grasso said it was under 3,000 as of Monday, down from almost 3,600 the week before. Kelly put the backlog Tuesday afternoon at about 1,800 claims.

For the extra Pandemic Unemployment Assistance program, Grasso said 11,000 people with claims had submitted part or all of the documents they’d need to receive it. He said the state had another 14,000 to 15,000 “phantom” claims that either had been abandoned or were fraudulent. He said the department was handling about 500 issues related the PUA program a day.

The Department of Labor has said it has received more than 150,000 fraudulent claims for PUA benefits. Suellentrop, a business owner, said his name was used for one a month ago.

Kelly said the department “has largely been stabilized” under Wright. He will now return to his old job as Kelly’s deputy chief of staff.

“Are there problems still? Yes. Will there be problems tomorrow? Yes,” Kelly said. “But it’s how we approach problem-solving that’s most important, and we have approached it pretty aggressively, and, I think, been able to resolve most of the problems.”

Flachsbarth joined the labor department in 2005 and became deputy secretary in January 2019, when Kelly took office. Kelly said Flachsbarth “knows the ins and outs of the issues” facing the agency.

Kelly and Department of Labor officials have blamed the agency’s decades-old computer system for the problems in processing claims. Grasso said officials have discussed technology upgrades costing about $30 million, with the cost possibly spread out over several years.

Suellentrop said: “We have to find a way to stand up another system … just absolutely as quick as possible. This is not going to go away.”

The pandemic also prompted Kelly to alter her plans for giving the annual State of the State address after the Legislature convenes its 90-day annual session Jan. 11. She plans to give a virtual address, rather than doing it in person with lawmakers, the Kansas Supreme Court and other officials packed into the Kansas Statehouse.

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