EDD suspends 1.4 million jobless payments

EDD urges workers with suspended claims to verify their identity

The state’s embattled labor agency has suspended payments for more than 1 million claims in response to widening fraud woes, a fresh blow to California workers who lost their jobs amid coronavirus- linked business shutdowns.

The Employment Development Department is notifying people that their unemployment payments were suspended because of suspicions their accounts were linked to fraudulent activity.

he state agency began to more closely scrutinize unemployment claims towards the end of 2020 and ahead of the start of extensions of unemployment benefits paid by the federal government.

“The EDD applied additional fraud detection screening to existing claims established during the pandemic,” the department stated. “About 3.5 million of them were deemed potentially fraudulent.”

Payment was suspended on 1.4 million claims, the EDD said.

The EDD said it was moving quickly to reach the workers associated with the suspended claims.

“Most of these individuals associated with them are receiving emails from EDD in their Unemployment Insurance account directly,” the agency said. “The rest are being sent mail via U. S. Postal Service directly to their address on file.”

The halt in payments comes as the EDD is reporting that its backlog of unpaid unemployment claims is again swelling.

The EDD, criticized for antiquated technology and a call center that can’t handle the volume of workers who need help getting their money, may have paid out $ 2 billion in fraudulent claims, according to one estimate.

With the suspension, many California workers are failing to receive the unemployment benefits they are seeking, either due to fraud concerns or because they are trapped in a logjam of unpaid legitimate claims.

Some workers have been without jobs since the coronavirus began to ravage the state and businesses were ordered closed to help combat the deadly bug. Business shutdowns began in mid- March and have remained in place to one degree or another since then.

The EDD made it clear that it’s up to workers to prove that their unemployment claims are legitimate.

“They’re being notified about what information will be needed from them to verify identity or eligibility in order for payments to resume,” the department said.

The agency warned workers that they must respond or face more dire circumstances.

“If no official response is received, claims will be canceled,” the EDD said.

State Sen. Jim Nielsen, a Republican from Northern California, who decades past also represented Yolo County, harshly criticized the EDD.

“This is more evidence of an out of control agency,” Nielsen said. “Because of their own sustained incompetence, they have now suspended claims.”

The EDD also came under fire from a state lawmaker who wonders whether the agency has gone overboard with its decision to suspend so many payments.

“While I certainly appreciate the need to crack down on EDD fraud, it’s incredibly hard to believe all 1.4 million of these claimants are fraudsters when so many are desperately calling our legislative offices asking for help in reinstating their benefits,” said state Assemblyman David Chiu, a Democrat who represents parts of San Francisco.

Adding to the difficulties facing California workers who have lost their jobs is a widening backlog of unpaid claims reported by the EDD.

The total number of unemployment claims that are stuck in the EDD backlog was 777,760 for the week that ended on Dec. 30, a dashboard posted on the EDD’s website shows. That’s an increase of 32,124 from the prior week’s backlog.

“EDD needs to find a way to root out fraud without harming so many Californians with legitimate claims,” Chiu said.

Nielsen said changes must be instituted at the EDD.

“This is a second time that claims are interrupted,” Sen. Nielsen said. “They are taking a problem and making it worse.”