DOL retirements jeopardize unemployment checks?

Without two key information technology workers who retired last fall, the state Department of Labor might not be able to adapt its computer system to new unemployment benefit extension requirements in time to get checks out to state residents, an agency official said Thursday.

The department wants to hire back the two retirees, but can’t legally do so, according to an advisory opinion adopted by the Citizen’s Ethics Advisory Board Thursday.

Ethics hearing

DOL and DSS officials listen as the ethics board considers their requests to allow retirees to be rehired

The board’s move also affects the state Department of Social Services, which has already hired back three IT retirees who Commissioner Roderick L. Bremby said are critical to maintaining the system of databases needed to administer programs serving more than 650,000 people.

Ethics board members expressed sympathy for department officials, who argued that critical state services would be in jeopardy without the ability to hire back recent retirees with specialized knowledge of mainframe computer systems they spent decades tweaking and adapting.

But board members suggested that the problems could be solved under Gov. Dannel P. Malloy’s authority, rather than by overturning previous ethics cases and potentially complicating enforcement of violations in similar situations.

“It’s not a matter of empathy. It’s not a matter of understanding the great difficulty and an appreciation of your situation,” ethics board Chairman David W. Gay said. “The question is how is that resolved in some sensible manner, and who has the best authority to solve it?”

Chris Drake, Malloy’s deputy legal counsel, who had asked the board to rule that hiring back these retirees was permitted, raised concerns about the ways the board suggested addressing the problems created by the retirements. But he said after the vote that the governor’s office will work with the labor and social services departments.

“We respect the board’s decision,” he said. “The governor’s office will have a conversation with DSS and DOL and we’ll see whether there’s a way to handle this through the executive branch authority.”

Unemployment benefits

Both departments lost key IT workers as part of a wave of people leaving state service last year in the months before a labor concessions deal changed retirement benefits.

The labor department has been seeking to hire back an IT supervisor and IT analyst as consultants hired through a contract with a vendor.

But the ethics board’s opinion says that doing so would violate a state statute that says that, for a year after executive branch employees leave state service, they can’t be compensated for work done on behalf of a vendor for the department where they worked.

Before the board voted, Dennis Murphy, the deputy labor commissioner, argued that the need to rehire the two retirees was critical.

Changes to unemployment benefits, including the extension Congress passed this month, require changes to the department’s complex mainframe computer system. The system runs on COBOL, an old programming language that most job candidates don’t know, but that’s not the only problem. Murphy said the two retirees created millions of lines of code to tailor the system over more than three decades, making the department’s technology essentially proprietary.

“It’s unique to them, rather than to the knowledge of COBOL,” he said. The details of the system were not properly documented when the retirees left, he added.

And without their expertise, Murphy said, “there is a substantial likelihood that we cannot extend unemployment. There is a very material reality that we will not be able to pay those people the unemployment benefits that they deserve.”

Food stamps, Medicaid applications at risk

DSS is in a somewhat different situation because it already hired back three retired IT workers after getting informal guidance from the Office of State Ethics that doing so would be permissible. The retirees’ continued employment at DSS violates the opinion the ethics board adopted Thursday, but Bremby said after the board’s vote that the retirees will continue working for the department until he comes up with a backup plan.

Bremby told board members during the meeting that the retirees had been making modifications to the department’s computer system, which also uses COBOL, over the past two decades, and that the changes weren’t documented. The department now needs the retirees to troubleshoot and maintain the system.

“The people that we’re talking about retaining are the only people on the face of this earth with the combination of skill sets,” knowing COBOL, how to administer the databases and how DSS’ system operates, he said.

Bremby said that without the retirees, there could be problems getting families food stamps or processing Medicaid applications. He noted that the department already struggles to handle its obligations with a computer system. “But just imagine if that system goes away,” he said.

Bremby told the board that he wasn’t sure what his “plan B” would be if the board did not allow the retirees to remain at work at DSS. “But I do know that I have to do what I can to serve the citizens of the state,” he said.

Other options

But Gay and other board members said there are alternatives to overturning previous ethics decisions or creating a new exception, which board members argued could present problems for similar cases.

State law prohibits the retirees from working on behalf of a vendor for their former agencies within a year of retiring, but board members asked why the departments couldn’t hire the retirees directly as consultants.

Jennifer Devine, a labor department attorney, said the Department of Administrative Services, which handles the vendor arrangements, no longer approves direct consulting agreements with individuals; the department only allows for hiring people through vendors, she said.

Board member Thomas H. Dooley noted that the Department of Administrative Services is part of the executive branch, and suggested that the governor ask the commissioner to allow these retirees to be hired directly, without a vendor.

“It seems to me if I were the governor, I could potentially in one quick conversation end the whole problem,” Dooley said.

Gay agreed, and said there are other options too. Under an executive order issued by former Gov. M. Jodi Rell, state agencies can rehire retirees for up to two periods of 120 days each at up to 75 percent of their former salaries.

The labor department retirees can’t be rehired under the 120-day provision because of the terms of their retirement agreements, but the DSS retirees can. Gay noted that two 120-day periods would get the retirees past most of the one-year period during which they can’t work for the department through a vendor.

But Devine and Drake raised concerns with the feasibility of those options.

One reason the administrative services department doesn’t want to contract with the retirees directly is that there are liability issues for both the state and the individuals, who would have to set up limited liability corporations, Devine said. “It’s not in the least bit attractive for them to do this,” she said.

As for allowing the retirees to be temporarily rehired, Drake said Malloy has the authority to amend or rescind Rell’s executive order, but said it applies to all state agencies and represents “what our office believes is good public policy,” limiting when state workers can retire, collect pensions and then come back to work for a salary.

“I don’t believe that Gov. Malloy is inclined at this time to revisit that policy,” he said.

Even if the state were to try to bring back the retirees under 120-day contracts, Drake said it’s unlikely to work because the retirees would only receive 75 percent of their former salaries, which is less than what the DSS retirees are being paid now through the vendor arrangement.

“We simply could not convince them economically to come back to work for the state,” Drake said. “Besides the fact that these people are capable of performing this work for other state agencies to which this revolving door rule would not apply.”

But Drake said he would bring the board’s suggestions back to his office.

As for the labor department, which, like DSS, is already working to replace its mainframe system, Murphy said, “We need to find out what we do next.”