The Assembly Budget Subcommittee on State Administration unanimously rejected a proposal by the Governor on Tuesday that would create a new working conditions agency, favoring instead more improvements at the Employment Development Department (EDD).
The meeting was the first time lawmakers formally checked back on the EDD in the Capitol following numerous improvements to the unemployment system late last year, as well as after the announcement earlier this year that as much as $31 Billion in fraudulent unemployment claims were filed in 2020.
During the long subcommittee meeting, the EDD said their backlog had actually been growing in recent months due to confusion over how to renew benefits a year after they had begun during the start of the COVID-19 pandemic. Between April 3 and April 24, the number of backlogged claims rose from 1.03 million to 1.05 million, with delayed claims awaiting further action going up up from 122,000 to 135,000 during the same period.
EDD Director Rita Saenz said under questioning by subcommittee members that the issues would be resolved within a few months and that the backlog would then continue to decrease again.
“To tell you the truth, I think that we’re going to begin to see light at the end of the tunnel probably at the end of June,” noted Saenz. “We are making progress. We are not satisfied with the progress we have made to date.”
However, many Assemblymembers were not happy with the explanation, saying that they should have foreseen that issue come up due to the large number of people still on benefits from last year.
“That should already be anticipated. And the rollout of that should happen a significantly longer period before so that you are already addressing constituent’s questions before they even have to not beat down our doors,” stated Assemblyman Adrin Nazarian (D-North Hollywood) to the EDD representatives.
Many Assembly Members also voiced their displeasure over Governor Gavin Newsom’s proposed Department of Better Jobs and Higher Wages, which would transfer over 1,600 EDD employees to the new department despite major issues with unemployment payments persisting in the EDD.
Assembly Members, LAO blast proposal for new agency
Both the Budget Committee and the Legislative Analyst’s Office (LAO) had derided the proposed new agency before the meeting on Tuesday. Reports from both indicated that the EDD needed to fix the more urgent goal of eliminating unemployment backlog before even considering a new department.
“The Assembly believes that the Labor Agency must focus its attention on fixing the Unemployment Insurance backlog and enforcing labor laws and regulations,” said the Budget Committee Report. “The Agency has not made sufficient progress on either of these goals so far in 2021. The Agency must first address these key concerns for the most vulnerable Californians before a conversation about expanding its role, as envisioned by this new department, could even begin.”
The LAO reported similar findings.
“The reorganization would require considerable attention from leaders of the EDD and labor agency at a time when the state’s urgent goal is to eliminate the backlog of unemployment insurance claims and prevent further fraud,” explained the LAO report. “In our view, the administration’s decision to move forward with a complex reorganization during the pandemic poses a potentially serious risk to the state’s ongoing efforts to eliminate the backlog of unemployment insurance claims.”
Both reports made an impression on Subcommittee members, many of whom echoed both of the reports findings.
“The time isn’t right to create a new bureaucracy in the EDD,” said Assemblyman Phil Ting (D-San Francisco) on Tuesday. “Given the multitude of ongoing problems at EDD, now is not the time to transfer numerous employees from the Labor and Workforce Development Agency to a newly created department. They’re desperately needed to resolve the tremendous backlog in unemployment claims, prevent fraud and implement job training programs to get people back to work.”
Rather than continue to debate the need for a new agency, lawmakers instead continued to press the EDD on reducing the backlog, with most bringing up how their own constituents were angry with the agency over the backlog.
“It’s starting to creep back up. That is an overall concern,” added Ting while questioning Saenz. “Our constituents are mad at us because they can’t get ahold of you.”
Republicans also added almost identical stories, saying that their offices keep getting calls from people whose benefits have not been activated yet.
“These are people that are extremely desperate,” said Assemblyman Tom Lackey (R-Palmdale). “They don’t have any other way to eat.”
Many Californians awaiting EDD payments noted to the California Globe that attempts to get needed benefits activated have not worked, with some still being without benefits since last year.
“I’m glad they’re grilling the EDD still and trying to get them into order, but in the meantime I’m still high and dry,” said one anonymous Modesto resident to the Globe. “I’m glad they’re more vigilant on fraud now, but they, in all that time, couldn’t figure out how to check faster too?”
“We don’t need some new agency. We need more people to stay at the EDD to sort all of this out. I spent 20 years giving in to the system, and when my time of need came and I didn’t get anything, well, what’s the word for being beyond furious? That was me and many other Californians.”
While the Governor’s proposal was rejected by the Subcommittee, with the EDD being pressed to reduce the unemployment backlog, the EDD did note some successes so far this year.
“We’ve made improvements like text message notification and document upload for better communication and improved services to our claimants,” added Saenz.
Further updates to the EDD’s unemployment backlog are expected in the next few months.