The year 2000 computer problem is coming 12 months early to the Labor Department, where the unemployment insurance program will begin feeling the millennium bug's effects on Jan. 4, 1999. The federal IT community is watching closely to see what happens.
The unemployment program will be the first federal program to have its computer systems roll data into the next century during real-life operations, said John Koskinen, chairman of the President's Council on Year 2000 conversion, at a briefing Tuesday. Other agencies have tested their computers in mock situations. But because states, which administer unemployment insurance for the Labor Department, establish one-year accounts for initial claims, new beneficiaries' files will process year 2000 dates beginning Jan. 4, 1999, the first business day of 1999.
Beneficiaries will receive their unemployment checks and should see little difference in the services they get from state offices, said Deputy Labor Secretary Kitty Higgins. Some states, however, will be running their offices with makeshift procedures because they didn't get their computers ready on time.
The Labor Department's computers, along with those of 37 states, are ready to handle Y2K data. But 13 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands will be using temporary fixes to keep services running. Some states are using a technique called "windowing," in which programmers tell computers to recognize any two-digit year code from 51 to 99 as 20th century dates and any two-digit year code from 00 to 50 as 21st century dates. Only the Virgin Islands has decided to manually process claims and write out checks, though some states will resort to manual processing if other fixes fail.
Koskinen said the unemployment system demonstrates how federal agencies can keep programs operating even if their computers can't handle the Y2K problem.
"If a system can't be totally remediated, that does not mean the program stops," Koskinen said, stressing that agencies must have contingency plans to maintain services if computers malfunction.
Koskinen applauded the Labor Department for its work with states to maintain services. Labor required states to submit contingency plans and independent certification of their systems' Y2K compliance. Higgins said Labor is continuing to monitor states' progress. While the states run the program, unemployment is still a federal benefit and it would be unacceptable for beneficiaries in some states not to get their checks, Koskinen said.
Those states that waited to fix their computers will suffer, however. Because they will be operating with stopgap procedures, the laggard states will build a backlog of accounting and remedial work that will have to be entered into databases once computers are fixed, Koskinen noted.
Each week, about 280,000 workers apply for unemployment. Last year, approximately 7.4 million people received unemployment checks, totaling $20 billion. If the Labor Department and the states hadn't addressed the Y2K problem by the end of 1998, 1.6 million beneficiaries would have been affected by the end of March, the department estimates. Instead, no beneficiaries should feel any impact, according to Labor officials.