Employment Development Department (EDD) Director Rita Saenz abruptly announced her retirement in a staff email on Friday, with Governor Gavin Newsom to appoint EDD chief deputy director of external affairs Nancy Farias to the post early next year.
Saenz had been in the position for a little over a year. Prior to Saenz, Sharon Hilliard was head of the EDD from February 2020 to November 2020. During that time, Hilliard oversaw the drastic ramp-up of COVID-19 caused unemployment benefits, leading to a massive backlog in the department of claims. However, this led to a massive rush-through of claims. While the EDD tried to get help to as many people as quickly as possible, it also led to fraudulent claims to slip through. By the time of Hilliard’s resignation in November 2020, the number of fraudulent claims totaled $31 billion, with a backlog of claims still in effect despite new upgrades to the EDD system.
Saenz took the reins the following month, and throughout 2021, managed to erase the claims backlog and fought fraud, leading to 345,000 disability claims to be frozen earlier this month as a result. However, the EDD has had numerous recurring issues during this time, with the fraud cases getting so bogged down that former federal prosecutors had to be called in to help out. More recently, the EDD has faced additional bad press by trying to recollect already doled out COVID relief funds to legitimate unemployed people, a situation that could lead to a bump of bankruptcies.
With controversies brewing at the EDD again, Saenz resigned on Friday. She noted that while the Department had improved during her tenure, especially in implementing reforms, problems still persist.
“This year has been an eventful one, following a just as eventful year before,” said Saenz on Friday. “During this time I have had the privilege to work with you a brilliant and dedicated staff. It has been such a pleasure.
“I am proud of the many reforms and new programs EDD put in place during the last year, and Nancy Farias has the energy and direct experience to keep this positive momentum going. I was privileged to work directly with Nancy Farias during this important time of transformation at EDD. She has worked tirelessly during these last 16 months alongside everyone else, leading, strategizing, and initiating new strategies. She has had a major hand in the transformations that are now taking place at EDD, and will continue to see them through.”
4 EDD Directors since 2020
Governor Gavin Newsom quickly issued a release following her resignation, naming Farias as the next Director.
“Nancy Farias has played an invaluable role in the Department’s ongoing efforts to strengthen the state’s unemployment system and implement improvements to better support hardworking Californians when they need it most,” noted Newsom. “I look forward to her partnership in this all-important work to help California’s families, businesses and communities continue to recover and thrive.”
Farias, who had previously served in multiple legislative, legal, and union roles, including serving as the Director of Government Relations at SEIU Local 1000 from 2017 to 2020, has been chief deputy director of the EDD since late 2020. She is expected to be sworn in on February 1st.
“What isn’t being said is that the rampant fraud and issues happening at the EDD have led them to having 4 different Directors since the beginning of 2020. Four,” emphasized Linda Ellis, an unemployment legal advisor, to the Globe on Friday. “Nobody is working out and all this fraud persists. This is very worrying. Everyone is patting each other on the back today over what they’ve done, but wow, they are missing the big picture here on how the EDD still needs a lot of help to modernize it.”
Saenz will become the next Commissioner of the California Commission on Aging following the transition of power on Tuesday.
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