California Halting New Unemployment Claims For Two Weeks To Catch Up On Backlog

Overwhelmed by a flood of jobless people amid the COVID-19 pandemic and struggling with aging technology, California’s state department responsible for paying unemployment claims has decided to stop processing new claims for two weeks as it attempts 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” from Saturday until Oct. 5 was included in recommendations from a “strike team” established by Gov. Gavin Newsom in July following 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 committed to getting this done,” Newsom said at a news conference Monday. “We recognize the magnitude of the responsibility and the challenge we have in front of us.”

“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.”

The employment department said Saturday that roughly 591,000 Californians are still waiting for initial unemployment claims filed more than three weeks ago to be processed. Some 1 million other people 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.

The backlog of claims is growing by 10,000 a day, the strike team report found.

A hotline the department set up for the public receives 6.7 million calls a week. But there are only 20 employees to answer the calls, the strike team said.

“We can safely estimate that no more than 1 in 1000 people that are trying to reach this call center on a givenday are getting through,” the strike team report found.

To tackle the backlog, the most experienced EDD staff members will be shifted to working through the oldest and most complex claims, Hilliard said. 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 will also install a new online identity verification tool in next two weeks to reduce fraud.

The agency said it expects to eliminate the backlog of unemployment claims in four months, by January 27. 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 two-week 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 should able to certify their benefits more quickly. The EDD will also 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 already have established claims will still be able to use their online accounts during the two-week “reset” period to manage existing claims and monitor their claim activity and payments.

Newsom, who took office in January 2019, said Monday that the employment department’s antiquated computer systems that run on 30-year-old Cobol programming.

“It needs to be upgraded. Frankly it needs to be simply strewn to the waste bin of history,” he said. “But nonetheless we inherited that waste bin and as a consequence we’ve been trying to patch it together.”

The department has been in a similar place before, a decade ago during the Great Recession.

Newsom called the backlogs a “wake up call” and said other states face similar aging mainframe computer systems, and that the report notes California actually is performing better than many of them with the mass of new applicants seeking unemployment insurance.

“As a nation, we have a huge IT problem,” he said. “We must completely reimagine our approach to large scale IT procurement.”

In a letter to Newsom 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 that state lawmakers acknowledge the historic drop in the state and national economy following 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?”


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