LAO Report Details Astounding Failures within Newsom Admin’s Unemployment Department

A new report by the California Legislative Analyst’s Office details astounding failures and errors within Gov. Gavin Newsom’s Employment Development Department (EDD), including payments that were delayed for 5 million workers and improperly denied for likely 1 million more.

“The department’s phone lines were routinely overwhelmed by the number of frustrated callers. These failures caused hardship for unemployed workers and their families, held back the economic recovery during both periods, and spurred frustration among Californians with their state government,” the LAO reported.

In fact, the EDD stopped answering phones altogether during the pandemic, and shut down all offices. The EDD website crashed and people were unable to file for unemployment online, the Globe reported.

Some other glaring problems at the EDD:

• More than half of the UI claims the Employment Development Department (EDD) denies are overturned on appeal.
• More than half of UI claims were delayed during the peak of the pandemic, for many workers by several months. Between 15 percent and 20 percent of workers who apply for UI during normal economic times experience delays.
• The state’s UI application and ongoing requirements are difficult to understand and unnecessarily lengthy, and asks workers to list detailed work history and salary information that EDD already maintains.

The LAO says “state policies and actions make it difficult for eligible workers to get benefits.” These include:

(1) the department’s tendency to improperly deny claims

(2) widespread payment delays

(3) the administration’s own assessment that the UI program is difficult for workers to navigate (4) state rules that make it unreasonably difficult for workers to prove eligibility, and

(5) recent actions that suggest that ensuring eligible workers get benefits is not a top priority.

“If you woke up today wondering whether one-party rule hurts California’s families, look no further than today’s report on the state’s failed employment department,” Senate Republican Leader Scott Wilk (R-Santa Clarita) said in a statement “following another scathing report highlighted failures within Newsom’s Employment Development Department (EDD).”

“This report highlights what legislators have heard far too often these last two years – Californians were left hanging, unable to pay their rent or feed their families because of bureaucratic dysfunction at EDD.”

Wilk said “Government incompetence caused the problem, and the governor’s refusal to fix it just made it worse. Now our job creators are stuck footing the bill while families are left with mountains of debt because of this government-created crisis. California claims to be the technology capital of the world. It’s time state leaders demanded better IT from its state agencies.”

In November 2020 then-California State Auditor Elaine Howle warned legislative leaders that the Employment Development Department had sent at least 38 million pieces of mail containing claimants’ full Social Security numbers since the start of the COVID-19 pandemic, as the Globe reported.

In early 2021, California Labor Secretary Julie Su announced upwards of $31 billion dollars in unemployment claims was sent to prison inmates in California’s county jails, and state and federal prisons, out of state, and even out of the country, while legitimate claimants have been stiffed for months, or received late payments, the Globe reported.

Sen. Wilk shared a list of bills Senate Republicans introduced in 2021 to #FixEDD, but they were buried by Democrats in the Appropriations Suspense File, which is a tactic for killing bills without recording a “NO” vote on them. Besides the introduction of Republicans’ bills, Senator Rosilicie Ochoa Bogh (R-Yucaipa) requested that the Joint Legislative Budget Committee for a crucial oversight hearing of the EDD in 2021.

• SB 39 (Grove, 2021) would require the EDD to cross-check prison inmate records with unemployment claims to prevent benefits from going to prisoners.
• SB 58 (Wilk, 2021) would require the EDD to immediately end the practice of including full social security numbers on its most frequently mailed documents.
• SB 232 (Nielsen, 2021) would implement State Auditor recommendations from the previous three audits of EDD.