On Wednesday, the Employment Development Department (EDD) announced that 246,000 of the 1.6 million backlogged unemployment claims have been paid and mailed following a two-week hiatus of claims. However, the backlog will still take well into January 2021 to address.
EDD has been behind claims since March
The EDD has been severely falling behind on processing claims in a timely manner since the COVID-19 pandemic began in March. With 1 million people in California filing for unemployment benefits only two weeks after the statewide shutdown began, and tying the amount of claims that were filed during the entire Great Recession after only the third week, the EDD was overloaded with calls, resulting in drastic measures such as rehirings and working long hours to get through all of the filings. During the summer, as new cases went down, the situation at the EDD failed to improve much. Only 25% of people calling in to file claims or needing assistance managed to speak to an EDD representative on average, and other issues such as improperly trained staff failed to keep up with the accumulated claims.
Assemblyman Jim Patterson (R-Fresno) soon called for an audit of the EDD. Lawmakers rallied around in support, and an audit hearing in the Legislature was penciled in for August 11th.
“This is a monumental failure at a time when millions of Californians need it most,” said Assemblyman Patterson in a July statement. “A 25% answer rate is absolutely unacceptable.
“When we turn the state auditor loose and put these bureaucracies under the white light of accountability and find the problems more often than not, we deal with them. We need to do two things at the same time. We need to get the attention of EDD to clean up their act now, but we also are going to have to get the auditors involved so that we can fix the long term problems.”
However, in late July, the EDD audit hearing was cancelled by Democratic legislators. While the reason given was because of the limited time legislators had this session due to both houses shutting down extra weeks during the recess because of a COVID-19 outbreak, many questioned that when, only a few days later, Governor Newsom announced his own solution in the form of an EDD “strike team.”
A two week hiatus
While both Republican and Democratic legislators were upset with this decision, the task force looked into problems at the EDD. In September they gave a report on the problems at the Department. This led to a major overhaul at the EDD, aimed at clearing backlog and reducing fraud.
However, to install all the updated systems, it was announced that the EDD had to stop receiving new claims for two weeks.
This led to even more outrage at the EDD, especially after many well-publicized layoffs in California, which had tens of thousands of newly unemployed people in the state left with no benefits for several weeks.
“Disney alone brought in five figures worth of new people trying to get benefits,” unemployment and jobs adviser Harriet Carter told the Globe. “Many of these new people were also living paycheck to paycheck. They can’t afford to miss a few weeks worth of pay, or in this case, unemployment funds. But the EDD stopped them anyway. It doesn’t matter if they’re getting money in a few weeks. Things like groceries and emergency money can’t wait. But the EDD didn’t even consider this.”
“I had people calling the EDD constantly for a date in which they get their debit card. Unemployment is scary, and people were panicking. Still are as a matter of fact.”
Backlog to continue until next year despite improvements
During Wednesday’s announcement by the EDD at the backlog being reduced, officials noted that some people have waited a long time for benefits, for some as long as five months, and that the backlog will continue to at least January.
“We’re very happy with the outcome and in fact we’re even a little bit ahead,” said an EDD representative on Wednesday on the backlog being reduced. “It’s taking time [to clear the backlog] because the work is very complex and complicated.”
The Department even highlighted a new system that would rapidly identify and verify the identity of claimants. The verification process was found to be the main cause of the backlog by the ‘strike team’, as almost half the cases had to be gone through manually by EDD staff. But with a new automated process installed during the hiatus, over 90% of claimants can now be identified by using new software.
The new verification system is still being refined however. Out of 101,159 claimants sent through the new verification system, 36,209 were not successful. While this is better than manual verification processes, it’s still far below the 91% promised by the EDD.
The EDD is also working to improve fraud detection after the updates, as the Pandemic Unemployment Assistance (PUA) program had brought in many people to be eligible for unemployment benefits when they usually were not, allowing many people to stay within the system.
“It has very little checks and balances,” the representative added. “I know the incentive was to make sure everyone gets paid and that’s what they were focused on. But the downstream effect was it opened the door for fraud in a way that we’ve never seen before.”
An approved emergency audit
Despite the EDD cutting back on the backlog, many have continued to call for an audit of the EDD. Legislators, led by Assemblymen Rudy Salas (D-Bakersfield) and Patterson, managed to get an emergency audit of the EDD passed by legislators in September and are hoping to get results in very soon.
“We are seeing, now, the evidence of the waste, fraud, and abuse at the EDD,” said Patterson last month. “It appears that their processes are facilitating the use of other people’s social security numbers and disseminating them through these fraudulent pail pieces statewide.”
The state auditor has yet to give an official timeline of the emergency audit.