State halting new unemployment claims

Agency in 2-week ‘reset’ to tackle backlog, with half-million still awaiting initial benefits

Overwhelmed by a flood of jobless people amid the COVID-19 pandemic and struggling with aging technology, California’s department responsible for paying unemployment claims has decided to stop processing new claims for two weeks as it tries to catch up on a massive backlog.

Sharon Hilliard, director of the state Employment Development Department, made the announcement in a news release Saturday night.

The two-week “reset” was included in recommendations from a “strike team” established by Gov. Gavin Newsom in July after months of growing criticism from state lawmakers and the public that unemployment benefits due to some laid-off workers have not been paid, that the agency’s staff has been difficult to reach by phone, that computer systems have failed, and that criminals using stolen Social Security numbers from corporate data breaches have fraudulently obtained EDD benefits.

“We are in this for the long haul,” Hilliard said in a statement. “The strike team’s recommendations provide an opportunity to pivot and improve our systems with a priority of delivering on the governor’s vision of innovative government systems that prioritize the customer experience, informed by data and great expertise.”

The employment department said Saturday that roughly 591,000 Californians are waiting for initial unemployment claims filed more than three weeks ago to be processed.

About 1 million others have received some form of payment, like an initial check, but have modified their claims with no response.

Fixing the problems won’t come quickly, however.

To tackle the backlog, the most experienced EDD staff will be shifted to working through the oldest and most complex claims. In addition, some of EDD’s new staff members will be redirected to processing mail and email items, and calling applicants for additional information needed to resolve issues on older cases.

The agency said it is aiming to eliminate the backlog in four months, by January.

Some critics of the department weren’t impressed with the moves.

“This is too little too late for some Californians who have been waiting for benefits since March,” said Assemblyman David Chiu, D-San Francisco, who has pressed the agency for more accountability.

“Every day my staff and I hear from constituents who have depleted their life savings, gone into extreme debt and now are struggling to pay the rent and put food on the table,” he said. “The fact we have the money and can’t get these checks out is enormously frustrating.”

The EDD said the twoweek delay will only affect people who are applying for benefits for the first time. During the two weeks, people who are looking to submit a new claim for unemployment insurance benefits online will be redirected to a temporary page where they can submit their personal information.

Because new claims will be backdated to cover the rest period, the agency said claimants will hopefully be able to certify their benefits more quickly. The EDD also will expand the capability of the new Document Upload feature for mobile users and allow for people to provide wage information and file military and federal employee claims online.

Also, Californians who have established claims will be able to use their online accounts during the two-week “reset” period to manage existing claims and monitor their claim activity and payments.

For Newsom, who took office in January 2019, the issue may be new, but the department has been in a similar place before, a decade ago during the Great Recession.

“This is unacceptable and so was the condition of the system when we inherited it,” Newsom said during a recent news conference. “We are trying to work aggressively through that backlog.”

In a letter to Newsom on Friday, Hilliard noted that the employment department had staffing levels in February “that accompany a 3.9% unemployment rate and was not prepared for the dramatic increase in unemployment we saw in March.”

California’s unemployment rate last month was 11.4%, down from 13.5% in July.

Chiu said state lawmakers acknowledge the historic drop in the state and national economy from the worst pandemic in 100 years. But he noted the Legislature provided the department funding to hire 5,000 new employees to address it.

“Hiring staff without adequate training or deployment makes things worse,” he said. “It is on EDD to effectively deploy the resources they have been provided.”

Republicans were more critical.

“The constant delays and failures at the EDD highlight Gov. Gavin Newsom’s inability to properly prepare for shutting down California’s economy,” said state Senate Republican Leader Shannon Grove. “What did Gov. Newsom expect when he closed down tens of thousands of businesses and put millions of Californians in the unemployment line?”