Unemployment Insurance Agency Stops Answering Calls

The California Employment Development Department began a two-week “reset” after a scathing report issued by Governor Gavin Newsom’s strike team found multiple issues at the beleaguered agency.

The report, dated Wednesday, September 16, was not officially released until 8:52 p.m. on Saturday, September 19, leading many prominent members of the media to speculate the administration was attempting to bury its findings.

The strike team reported that only 20 staff members (out of several thousand) were answering unemployment insurance claims calls when the governor shut down the economy during the COVID-19 pandemic, and only from the hours of 8 a.m. to noon.

The EDD only answered approximately 40 percent of the calls that came into the agency, leading to a 1.6 million-claim backlog. Many observers believe the backlog is much higher. The claims won’t be resolved until late January, according to the EDD director.

Additionally, after constituents complained to the Legislature that they were receiving multiple EDD letters, it was discovered that the EDD was a target to out-of-state fraudsters who used stolen identities to receive unemployment benefits and defraud the unemployment system.

The strike team recommended that the department adopt a “burndown plan” and take a two-week reset in which it would shut down new claims, deploy an identity verification system used at the Department of Motor Vehicles and redirect high-skilled staff to focus on processing current claims. The two-week shutdown is scheduled to end October 5.

1 view

California Tax Foundation   |   1215 K Street, Sacramento, CA 95814   |   916.441.0490   |   foundation@caltax.org