California will try to fix its unemployment system. Here’s when it could happen
Little by little, it should become easier to deal with the Employment Development Department, thanks to a series of measures the Legislature has passed.
But don’t expect problems to suddenly evaporate.
“It’s going to take California and other states a year at least to clean up this mess,” said Andrew Stettner, senior fellow at the Century Foundation, which studies unemployment trends.
Gov. Gavin Newsom had much the same thought.
“This is without precedent. The system wasn’t designed to absorb this pandemic. Now we are in the process, through the budget I just signed, to invest hundreds of millions of dollars to re-imagine not just the technology. but the business process at EDD,” he told The Sacramento Bee.
The agency is still dealing with the same issues that have overwhelmed it since the COVID pandemic began 18 months ago, though the volume of activity has diminished:
▪ People still routinely report delays getting through on the phone. EDD reported 2.3 million calls to its unemployment insurance call center last week. Many of the calls are repeat attempts by the same caller. Of the 219,232 individuals who called, 183,366 got an answer.
▪ As of last week, almost 74,000 claimants had waited more than three weeks to find out if they were eligible for their first claim. Newsom called it a “stubborn backlog.”
Another 103,000 claimants are awaiting an eligibility determination on an issue that has come up on their existing claim after they got at least one payment. EDD began a program to provide them conditional payments if they’ve been waiting more than two weeks as the department works to resolve the eligibility issue.
▪ An estimated 2.2 million Californians lost their federal benefits as of Sept. 11, and many are turning to EDD. The department tells them that different state programs can help with rent, utilities, food, low-cost health insurance and other needs. Also available are the America’s Job Center of California locations around the state to help people find jobs.
Help for EDD
Bills approved before the Legislature ended its 2021 session could mean important changes, some now, some later. Newsom has until October 10 to sign the bills, and his office said Friday it “typically does not comment on pending legislation.”
Fraud should be easier to detect. Direct deposit will eventually be readily available. More staff will be added.
If someone makes an error when certifying for a claim, they can correct the error instead of facing a long delay in getting paid.
More help already is available for those who speak a language other than English.
“If you are a constituent with limited English proficiency, you should already see a difference. There are more people who can talk to you in the language you speak and more translated materials,” said Assemblyman David Chiu, D-San Francisco, who has been active in making changes.
EDD has been overwhelmed since the COVID pandemic began 18 months ago with a deluge of unemployment claims. For the week ending March 7, 2020, 43,877 claims were filed. Two weeks later, that figure jumped to 1.06 million.
The numbers remain far from pre-COVID levels. In the week ending Sept. 4, EDD reported 130,985 new claims, including new claims filed and those re-opening their claims after leaving their benefits for a while.
EDD has handled a total of 24.5 million claims since mid-March 2020, and paid a total of $173 billion in claims since then..
Reports from the state auditor found it lacked the technology and the staff to deal with the barrage. The department was hit with billions of dollars in fraudulent claims. Consumers routinely reported frustration in reaching the agency.
Newsom took several steps since last summer to beef up staff, expand call center hours and expedite claims. The complaints continued to roll in, and State Auditor Elaine Howle found several serious lapses in EDD’s operations.
She made five recommendations to the Legislature, which essentially adopted them.
But experts and lawmakers warn that the frustrations consumers have endured won’t suddenly disappear.
Be patient, Stettner advised. “They made a lot of improvements and changes. They are trying. They are taking a data-based approach in improving customer service,” he said.
Timeline for easing delays
Assemblywoman Cottie Petrie-Norris, D-Laguna Beach, said she’s confident “meaningful reforms” made their way through the Legislature this year.
Petrie-Norris cited her bill that would require the department to cross-check California Department of Corrections and Rehabilitation incarceration records with unemployment claims. It would seek to avoid the kind of fraud that resulted in hundreds of millions of dollars being paid out to inmates last year, mostly as part of the new federal Pandemic Unemployment Assistance program. That program ended September 4.
Still, Petrie-Norris said more work is needed to address the “nitty gritty” details, like the department’s operational challenges and technical issues.
EDD says the bills codify what it’s doing to speed up claims and make other changes. Here’s a timeline of what to expect from this year’s legislative activity:
▪ 2021-23. $5.5 million this fiscal year and next, to fund positions to help plan and implement the direct deposit program.
▪ 2021-23. $21 million to bolster education and outreach in communities that need multilingual access to EDD services and programs. One of the initiatives would expand the existing telephone interpretive services for more than 150 languages and dialects. Also included would be hiring a multilingual access coordinator.
▪ May 1, 2022. EDD has to give the Legislature a plan for assessing the effectiveness of existing fraud prevention and detection tools.
▪ December 1, 2022. EDD has to provide special phone lines for unemployment insurance claims.
▪ January 1, 2023. EDD has to give the first of what will become an annual analysis and assessment of fraud prevention tools.
▪ January 1, 2024. EDD has to give anyone receiving unemployment benefits the option to get the money via direct deposit or, if they choose, debit card or check.
▪ February 1, 2024. EDD must establish and host a multilingual access portal.
▪ April 1, 2024. EDD must provide an unemployment insurance web page in multiple languages.
The bill also requires EDD to create a new unit to coordinate fraud prevention efforts, get a list of all frozen Bank of America accounts to make sure they were not incorrectly frozen, and set up a group that will act to expedite the claims process.
Those provisions were part of legislation sponsored by Assemblyman Rudy Salas, D-Bakersfield. He said the changes have “sent a clear message to EDD...that reforms are needed right now.”
Can EDD be fixed?
EDD has faced technical trouble and limited staff before. Its work is cyclical, overwhelming when the economy falters and slower when it’s not.
“Even before the pandemic, the UI system in California did not work well for employers or workers,” said Michael Bernick, who ran EDD from 1999 to 2004.
Bernick, a San Francisco employment and labor lawyer, sees several immediate challenges: the huge unemployment insurance fund deficit, the need to continue combating fraud and getting people back to work.
“Beyond these challenges, the system needs to be overhauled more fundamentally both in reducing complexity and functioning as a reemployment system, not only a benefits system,” he said.
Give that time, lawmakers said.
“Our bills addressed some immediate challenges facing EDD during COVID-19,” said Chiu, “but there is much more we need to do to rehaul a department in need of comprehensive reform, modernize its IT system, and stabilize the unemployment trust fund for the long run.”
Sophia Bollag of The Sacramento Bee Capitol Bureau contributed to this report.
This story was originally published September 20, 2021 at 5:00 AM with the headline "California will try to fix its unemployment system. Here’s when it could happen."
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