California Unemployment Claims Backlog May Persist Until Next Year

September 23, 2020 Updated: September 23, 2020

California officials said it may take until Jan. 27, 2021, for the state’s Employment Development Department (EDD) to work its way through a massive backlog of unemployment cases accumulated during the COVID-19 pandemic.

The EDD implemented a “two week reset” starting Sept. 19 to address the issue, among others, and said the agency would stop accepting new unemployment claims during that time.

The reset takes place after months of delays in processing applications and allegations of rampant fraud. The move provoked outrage among some state politicians.

The state has about 600,000 unemployment applications more than 21 days old that have not yet been processed, according to the EDD. Another 1 million Californians have received payments from the state, but have since modified their claims and are awaiting a review to continue receiving benefits.

“We will be clearing backlog every single day between now and January,” said Sharon Hilliard, director of the EDD, at a Sept. 21 press conference.

She added that this doesn’t necessarily mean individual applicants will have to wait until January to receive their unemployment checks.

Sen. John Moorlach (R-Costa Mesa) called the move “unacceptable.”

“The Governor should have people working around the clock to fix this problem,” Moorlach said in a statement.

“The past six months my office has helped more than 700 constituents with EDD problems. For the EDD to halt new claims means more unneeded suffering.”

Earlier this month, Moorlach joined a bipartisan group of 40 legislators—including Assemblymember Rudy Salas (D-Bakersfield), chair of the Joint Legislative Audit Committee—to request an emergency audit of the EDD.

“Californians are hurting and need immediate relief from EDD,” Salas said in a statement.

“I am calling for an emergency audit within the legislature’s rules for more transparency and accountability with EDD’s operations, ensuring economic assistance is going to families that are continuing to suffer during the pandemic.”

During the two-week reset period—which ends on Oct. 5—the EDD will be installing a new automatic ID verification software system that will process 90 percent of cases automatically and “substantially mitigate fraud,” Gov. Gavin Newsom said at the Sept. 21 press conference.

Newsom blamed many of the problems on an “old, dilapidated system” and claimed the two-week pause would benefit those who are planning on applying for unemployment for the first time.

“We believe that this reset will make not only this process better in the medium and long term, but begin to substantially address the backlog over the next 90 to 100 days, with the goal to substantially have addressed it and not impact any people that are applying for the first time in terms of the timeliness to a check,” he said.

The changes come following the Sept. 16 release of a report by a “strike team” Newsom formed in July to investigate problems in the EDD and establish a plan for reform.

Co-chair Yolanda Richardson said the team made more than 70 recommendations to help improve the unemployment application process for Californians.

“This is about getting a check into their hand much faster,” she said at the press conference.

The crux of the issue is “a logistics and workflow problem” with processing unemployment claims, according to the report.

While the EDD can typically process up to 2,400 claims manually per day at “maximum throughput,” an investigation showed more than 20,000 claims were being diverted daily into manual processing, mostly for identity verification, according to the report.

The new ID verification software system is expected to address this exact issue.

In addition, the report recommended that the highest-skilled staff immediately start working on the more complex older cases to reduce the backlog and provide relief “to many claimants as soon as a few weeks from now.”

Moorlach said the request for an emergency audit of the EDD had been approved and is expected to start soon.

Another request for an audit was made in July to the Joint Legislative Audit Committee by Assemblyman Jim Patterson (R-Fresno), who said the EDD has had problems since before the pandemic.

“According to data from Deloitte Consulting, during one week in May, out of 1.5 million total phone calls from 600,000 unique calls, only 150,000 were able to speak to a live person. This means 75 percent of people calling didn’t get the attention they so desperately needed,” Patterson wrote in the audit request letter.

On a more positive note, California’s unemployment rate fell to 11.4 percent in August from 13.5 percent in July, with employers adding 101,900 jobs, according to the EDD.

“California has now regained nearly a third (33.9 percent) of the 2,615,800 nonfarm jobs lost during March and April as a direct result of the COVID-19 pandemic,” the agency stated on Sept. 18.

Follow Sarah on Twitter: @dadasarahle