Californians Still Struggling To Get Unemployment Benefits As Audits Slam EDD Over Delays, Fraud

Thousands of Californians who lost their jobs due to the coronavirus pandemic are still struggling to get problems with their unemployment benefits sorted out with the state’s unemployment agency.

The Employment Development Department, subject of two scathing state audits over its handling of the surge in unemployment claims and billions of dollars in fraudulent claims, says it was hit by a “perfect storm” in February when claims soared amid low-staffing levels. 

But lawmakers and the recent audits say the department was less prepared than it could have been to deal with the spike in claims, and ineffective at preventing an estimated $11 billion in fraud.

Politico California reporter Katy Murphy, who has been covering the issues plaguing the EDD, told CapRadio's Insight that the problems are so intertwined that trying to solve one creates another.

“One of the big things that lawmakers are really pushing EDD on and they're really grappling with is this balance between fraud prevention and getting people, legitimate people, their money,” she said. “And the question of whether the pendulum has gone too far in the other direction and to the detriment of innocent people who've been swept up in this and are getting ... increasingly desperate.”

California Assemblyman Jim Patterson, who represents the Fresno area, says his office has fielded 3,000 calls from constituents who have yet to resolve their problems with the EDD. He and other lawmakers on Thursday introduced a package of bills intended to force quick change at the EDD. 

Patterson says the issues are a result of an agency embedded in bureaucracy and old processes.

“How many times do we have to hear the word modernize before we actually see it?” he said on Insight. “This is a systemic, long-lasting problem." 

Patterson said frustration from both Republican and Democratic lawmakers was palpable at a hearing Wednesday at the state Capitol where State Auditor Elaine Howle delivered her reports on the EDD to the Joint Legislative Audit Committee and the Assembly Insurance Committee. 

“And honestly, you have to put the responsibility where it belongs. And that is on the desk of the governor,” he said. “This is an executive branch operation over which he has authority — hiring and firing and appointive power. And it just has been a failure.”

California Gov. Gavin Newsom appointed a new EDD director, Rita L. Saenz, in December following former Director Sharon Hilliard’s retirement. But Patterson says the lack of improvement by the EDD has become routine, and all he sees is “marginal dinking around the edge.” 

“I have no confidence that bureaucracies in the state of California that are highly politicized are going to be able to make these kinds of changes,” he said. 

Meanwhile, EDD Public Affairs Deputy Director Loree Levy says the department understands the frustration and hasn’t given up on reforms. 

“We are already making changes and they're really important on both ends — on how we serve our customers, as well as how we fortify the system against fraud,” she said on Insight. “So that work is ongoing. We continue to evolve and rebuild this plane in midair and we're committed to doing so moving forward.”

Levy said the massive amount of fraud emerged as a result of the department having to implement a new federal program, the Pandemic Unemployment Assistance program for self-employed workers, in which information couldn’t be crossmatched with information from employers.

“Unfortunately, we have some very sophisticated crime rings out there on the domestic and the international level that are sitting on a treasure trove of stolen personal identifying information due to data breaches and so forth, getting it off the dark web, and were ready to pounce and assault unemployment insurance systems across the country,” she said. “And no state was really set for that.”

Levy said she’s been at the EDD for 20 years and has never seen the department face as many challenges as the pandemic has created, from the growing number of claims to changing policies from Congress.

“The volumes are just off the charts,” she said. “I mean, unprecedented doesn't even begin to address it. 

Jennifer Shaw, president of the Shaw Law Group and an expert in employment law, said that instead of finger-pointing, the focus should be on those confused Californians who deserve immediate help.

“What I'm concerned about is, I understand they need better technology. I understand they need more people. I don't think anybody can really argue about that,” she said. “But there are some pretty simple things that could be done in terms of just giving these individuals access to speak to someone to get an answer.”

Shaw said she’s talked to people who have become so fed up, they’ve “thrown their hands in the air.”

“I just want to encourage everyone who's listening, keep going, keep emailing,” she said on Insight of those people looking to get benefits. “I do know the EDD is working on the communication, but what I don't want people to do is give up.”