California sees suspicious surge in unemployment claims
SACRAMENTO, Calif. — California is reporting a surge in coronavirus unemployment claims last week for independent contractors, gig workers and the selfemployed, and the tens of thousands of claims are raising renewed concerns about widespread fraud.
The state received more than 77,000 additional claims compared with a week earlier, accounting for more than a quarter of all such claims nationally, according to numbers released Thursday by the U.S. Department of Labor.
The claims fall under a program Congress approved last year to give unemployment benefits to people during the pandemic who are usually ineligible to receive them.
The state Employment Development Department has been overwhelmed with unemployment claims since March, when Gov. Gavin Newsom imposed the nation’s first statewide stay-at-home order that shuttered many businesses. The state has processed more than 19 million claims and paid out more than $113 billion in benefits.
About 4 million claims and $43 billion in payments fall under the program for independent contractors. The program has helped a lot of people who are selfemployed weather economic shutdowns from the virus. But its broad eligibility requirements have made it a target of criminals seeking easy paydays.
Thursday’s increase was in new claims, not those from people extending or renewing them under a Congressional extension.
That alarmed Michael Bernick, a former Employment Development Department director and attorney with the Duane Morris firm.
Most independent contractors in California should already have filed new claims in the previous nine months, he said.
“The (new) claims numbers make no sense, other than indicating the re-emergence of fraudulent claims,” Bernick said.
The Employment Development Department, in an email to The Associated Press, said it “could not speculate” as to the cause of the surge. But Gov. Gavin Newsom and other officials have repeatedly blamed the program as the source of most of the fraudulent claims.