Oregon unemployment is at a record low, but the employment department is struggling with customer service, just as it did during the early days of the pandemic, when applications for jobless aid were at a record high.

A year ago, the Oregon Employment Department answered almost every call in less than 10 minutes, according to agency data. Now, most callers are on hold for at least 10 minutes and 20% wait at least a half hour.

The department has been struggling since the pandemic with resolving overpayment issues.

Now, a steep drop in federal assistance for state employment agencies has resulted in the Oregon agency cutting its customer service staff by two-thirds since 2021.

The result is more uncertainty and confusion for laid-off workers and those seeking to resolve old issues with the employment department.

During the first days of the pandemic in 2020, the employment department became notoriously unresponsive. As employers laid off hundreds of thousands of workers, the department was fielding as many as 89,000 claims per week.

Hamstrung by a decade of dysfunctional leadership and the state’s failure to upgrade computer systems from the ‘90s, the agency was among the slowest in the nation to distribute aid during the steepest, deepest economic downturn in state history. Oregon was the very last to pay some pandemic-era benefits.

Frustrated Oregonians, receiving conflicting information or no communication at all from the agency, jammed its phone lines to try to get their benefits before their savings ran out or their bills came due.

The department took weeks or months to process claims and left thousands of workers in the dark about the status of their benefits. Under pressure from state lawmakers and Oregon’s congressional delegation, Gov. Kate Brown fired the department’s director.

Performance improved steadily in 2021 and 2022 as new agency Director David Gerstenfeld implemented a series of reforms, and as the number of jobless claims plunged. Oregon’s unemployment rate was 3.4% in July, the lowest point on record, and the employment department is fielding fewer than 3,500 new benefits claims weekly.

Call the employment department today, though, and your experience might be similar to what people endured during 2020.

Automated letters from the department this summer directed benefits recipients to call disconnected phone numbers. Those who do get through are likely to find themselves on hold for at least 10 minutes, and often much longer, listening to a message incorrectly attributing the delay to “unprecedented” call volumes.

So why is the agency’s customer service deteriorating even though the number of people it’s serving is so small?

The employment department blames a steep falloff in federal funding. Congress provided billions of dollars to bolster the administration of state benefits programs during the pandemic. That money is all gone now, and so the employment department has cut staff in its unemployment insurance division by two-thirds since July 2021 — from 1,200 positions to fewer than 400.

Hold times spiked in November after the department eliminated another 200 short-term, customer-service jobs after the loss of federal funding that supported those jobs.

“That funding continues to be inadequate and to decline,” Gerstenfeld said. “That gets reflected in some of the customer service levels. That’s something we’re working hard to combat.”

The employment department said it would look into the why its letters list disconnected phone numbers and why the hold messaging still describes unprecedented call volumes, after The Oregonian pointed out those issues.

The agency is working to bring down hold times, too, but Gerstenfeld said he isn’t optimistic about meaningful improvement anytime soon.

“I think that’s going to, frankly, be a challenge given the federal funding,” Gerstenfeld said.

Hold times for unemployed Oregonians are rising just as the department is launching an ambitious new program, Paid Leave Oregon, offering benefits to people who take time off to care for family members, their own medical issues or because they’ve been a victim of sexual assault, domestic violence or stalking.

The employment department has already received more than 7,800 applications for the program, which starts paying benefits next week. But Gerstenfeld said he’s optimistic that the new paid leave program won’t run into the same customer service issues plaguing unemployment insurance. That’s because Paid Leave Oregon gets its funding from a tax on workers and employers rather than relying on unpredictable federal money.

For those seeking unemployment benefits, Gerstenfeld said service may improve next year when the employment department finally replaces its obsolete computer systems. He said the new technology will enable many people to resolve questions online, without calling the department. That could also free up customer service personnel to answer more complex questions.