Unemployment claims paused for 2 weeks as report reveals 600K awaiting benefits in EDD backlog

California will not accept new unemployment claims for the next two weeks as the state works to prevent fraud and reduce a substantial backlog, officials said late Saturday.

ByLuz Pena and Renee Koury KGO logo

Monday, September 21, 2020

600K Californians wait for EDD benefits amid backlog, report finds

California will not accept new unemployment claims for the next two weeks as the state works to prevent fraud and reduce a substantial backlog, officials said late Saturday.

SACRAMENTO, Calif. (KGO) -- It's the latest disappointment from the state's employment development department. This weekend they announced that they are taking a break and will not accept new unemployment claims for the next two weeks. In a report, the EDD claims their strike team needs the two weeks to tackle "fraud" and "reduce" their backlog.

"It's overwhelming. People are hurting and living off their credit cards," said Senator Scott Wiener.

Senator Scott Wiener says not even his office has any luck getting through the EDD phone lines, "They are saying that it's going to take months and months for them to clear this backlog and that is unacceptable," said Wiener.

The decision came as Gov. Gavin Newsom released his highly anticipated task force report on the EDD's massive delays in delivering benefits for millions of Californians who suddenly lost their jobs during the pandemic. The task force found that 600,000 workers still have not received benefits they applied for at least three weeks ago. Another 1 million workers who started getting benefits were suddenly cut off for various reasons and are still waiting for EDD to resolve issues and restore their payments.

The report found the biggest roadblock to benefits stems from the EDD's efforts to stop scammers from filing false claims and raking in benefits. Some legislators suspect fraudsters have collected millions of dollars in benefits while legitimate workers still wait . The EDD has been requiring identity verification for possibly millions of applicants in the effort to weed out fraud.

However, officials say the verification system is slow and outdated, preventing legitimate workers from getting their benefits.

The EDD currently mails paper notices to claimants whose cases are flagged often for small mistakes on their forms. Each applicant must send a response by U.S. mail or fax along with the required documents to prove their identity.

That requires someone at EDD to open the mail and manually review each case, a process that has been frustratingly slow and often a dead end for those with legitimate claims. Many have reported they mailed in the required forms and never heard back from EDD. Hundreds came to ABC 7 On Your Side to resolve cases that languished for months at the EDD.

Oakland resident, Muhammad E. has been calling EDD since May about his brother's unemployment claim but instead they got a surprise in the mail.

"This is one of the letters here and this is another one. This is the whole stack here," said Muhammad E.

They received 40 letters that appear to be from the state's employment development department with other people's names.

"When I saw that I was thinking maybe the EDD is sending information to people at wrong addresses and so maybe my brother has a letter out here. My cousin might have a letter out there that he was supposed to respond to," said Muhammad.

Another possible glitch to add to the list of changes that are needed.

Under a new system directed by the task force, the EDD will begin using an online tool to automatically verify the identities of new applicants, rather than relying on the old manual identification review. The online system will use algorithms and database access to automatically verify an applicant's true identity.

VIDEO: EDD troubles 6 months later -- has anything improved?

Six months after the pandemic threw millions out of work, the EDD still can't deliver benefits to thousands -- but it is paying scammers.

In the long term, the report recommends an overhaul of technologies to make the much maligned online application system a smoother, more user friendly experience. The EDD will also move their most experienced staffers off the phone lines so they can work on more complex cases for those who have waited more than three weeks for benefits.

The report did not indicate how many have waited longer than just a few weeks, but many workers reported to 7 On Your Side they've been waiting since April or May.

The EDD is also putting new applicants in a two-week waiting period so their applications can be processed under the new automated ID verification system. Officials believe the wait will actually expedite their claims, since they will benefit from the speedier verification process.

EDD has been criticized also for leaving the public in the dark about how many claims it's processed and how many are still waiting. The task force directed EDD to report weekly on the current backlog of cases and provide an estimate of the time it will take to clear it up.

The goal is to eliminate any backlog by January 2021.

The Employment Development Department has been hampered throughout the pandemic by outdated technology at a time when California is seeing an unprecedented wave of unemployment claims. While the department estimates that about 2.1 million residents were out of work statewide last month, California's unemployment rate fell to 11.4% in August, down from 13.5% in July.

Back in August, Assembly member David Chiu authored a letter with 71 legislator asking Governor Newsom to reform this department.

"At this point I'm hoping that this is the lowest point for this agency and with the 72 recommendations in this report they'll be turning things around but given the challenges in recent months we will see happens," said San Francisco Assembly member Chiu.

Chiu is hoping the new system and the two extra weeks will be the last set-back and added, "For those California's who already applied for unemployment benefits they are going to be stuck in this backlog and at this moment we understand from the administration these issues may not get resolved until the end of January."

Anyone who files new claims between now and Oct. 5 will be directed to a temporary web portal to fill out required information, which won't be processed until the new automated ID verification system is put in place. That is expected to weed out fraud from the start, and speed up the claims process for new applicants. It does not address how it could help those with old claims still awaiting review by EDD, their benefits stalled.

"New claimants should not see a delay in benefit payments, and in fact many of them will actually get their payments faster as they avoid the older time-intensive ID Verification process," Employment Development Department Director Sharon Hilliard wrote in a letter dated Friday to California Gov. Gavin Newsom.

Hilliard's actions, including the two-week pause on new claims, stem from recommendations made by an unemployment "strike team" that was appointed by Newsom in July. The governor wanted the team to address the current unemployment issues from the pandemic, as well as consider long-term solutions to get the department better suited for future economic downturns.

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