LYNN LA • MAY 16, 2023
Many Californians who lost jobs during the pandemic have been facing ongoing battles to receive unemployment benefits.
During the first few months of the COVID shutdown, the state Employment Development Department became inundated with 29 million jobless claims. Since then, it has paid out $188 billion in unemployment benefits.
But as CalMatters’ investigative reporter Lauren Hepler writes, many Californians are still struggling to receive their money.
When the pandemic hit, state and federal officials waived many standard application requirements for unemployment benefits. As the claims flooded in, the department estimated that it paid as much as $31 billion to scammers in its rush to distribute funds. (This fraud is one of the key reasons Republicans are campaigning against Julie Su, President Biden’s nominee for U.S. labor secretary, who oversaw the department’s operations at the time serving as state labor secretary.)
Investigators say organized identity theft rings, dodging the agency’s automated application systems, were responsible for most of the fraud. But department anxiety about illegitimate claims has ramped up — especially considering that California still owes the federal government $19 billion in unemployment debt.
- Jenna Gerry, senior staff attorney at the National Employment Law Project: “It was a perfect storm. Instead of being like, ‘Wow, that was really bad. How do we make reforms now?’ … All people want to lift up is fraud, and not actually look at the systemic issues.”
In the fallout, the analyst’s office for the Legislature estimated that about 1 million workers have been wrongly denied benefits, many on the basis of alleged fraud. To get their benefits, workers must request the department to review their case, where some are transferred to another labor agency called the California Unemployment Insurance Appeals Board. There, the average case languishes for 139 days, compared to the federal government’s wait time target of 30 to 45 days, Lauren reports.
In the summer of 2020, the vast majority of cases flagged for manual reviews appeared to be innocent mistakes on forms caused by confusion, clerical errors, language barriers or disagreements between workers and employers. Just 0.02% of the 1.3 million cases flagged were likely fraud and “the cost of finding that small number of imposters is extremely high,” according to an Employment Development Department Strike Team report.
The appeals board said judges are now doubling their rate of closing cases per month since before the pandemic and it’s setting up an online portal for workers to track their cases. It has also hired and trained 105 judges and 100 staffers to help clear the backlog, however the assistant director of the appeals board, Gregory Crettol, estimates it will “likely take several more years” until case numbers return to normal levels.
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