Once-troubled state employment department seeing improvement, director says

California's unemployment insurance agency, after stumbling in the aftermath of the Great Recession, is making strides toward improving service to the jobless, the program's director told members of a state Senate oversight committee.

"We are meeting the service goals," said Patrick W. Henning Jr., director of the Employment Development Department. New funding and staff "enable us to be better prepared to provide assistance in the next economic downturn."

Henning told the Senate Labor and Industrial Relations Committee on Wednesday that he hopes to fill gaps in service created by antiquated telephone and computer equipment by providing access to Internet-based communications, including via smartphones.

“We need to get ahead of the curve," he told the panel. "Prior to my getting appointed, there was a lot of calamity. We need to provide an unemployment insurance program that is ready for the next downturn. We have to get a better, more robust computer system.”

Overall, he said, “we are doing the best that we can with what we have. … What we are rolling out will get us to better service. ... It’s significantly better.”

Henning took over the troubled EDD with a staff of 10,000 people a year ago with a mandate from Gov. Jerry Brown to end long delays in the delivery of benefits of up to $450 a week. The EDD bureaucracy at the time was struggling to deal with a glitch in its 30-year-old computer and a phone system that automatically hung up on most callers.

Meanwhile, huge demands for assistance added to the backlog. It processed more than $40 billion in benefits in 2010 and 2011 alone.

The state's unemployment rate was only 4.8% prior to the recession, but it ballooned to a high of 12.4%, putting tremendous strains on staff and equipment, according to a Senate committee briefing paper. It subsequently fell to 7%.

Last year, tens of thousands of frustrated Californians still found it nearly impossible to reach a state claims worker by telephone. On top of that, a significant glitch in a 2013 computer modernization project delayed payments needed for housing, food and gasoline.

Since then, the EDD hired hundreds of new staffers and boosted is service, Henning said. The agency now answers 50,000 phone calls a week, processes 100% of initial claims within three days of receipt and handles online inquiries within five days of receipt, he said.

The EDD recently reported that as of last year it was answering 60% of phone calls, up from only 11% six months earlier.

Looking ahead, the committee staff urged EDD administrators to continue upgrading both computer and phone technology so the agency could be prepared to deal with a jump in unemployment during the next economic downturn.

Staff also urged the EDD to improve its eligibility decision-making to deal with a recent state auditor report that more than half of initial denials of benefits were being overturned on appeal.

The committee also alerted lawmakers and the Brown administration that the state's unemployment insurance fund has been insolvent since January 2009. The state has had to borrow billions of dollars from the federal government to pay Californians' benefits.

California is expected to owe Washington an estimated $7.5 billion by the end of this year. The current budget proposal earmarks $184 million to cover interest on the debt.

The deficit will take years to pay off, unless lawmakers agree to raise unemployment insurance taxes on employers, cut benefits to the jobless or enacts some combination of the two, the committee briefing said.

 Twitter: @MarcLifsher

Copyright © 2016, Los Angeles Times