The state Employment Development Department said late Tuesday it will begin to pay out all backlogged unemployment benefits as soon as Thursday.
The backlog of about 80,000 claims began when the EDD upgraded its 30-year-old computer system over Labor Day weekend with the aim of streamlining benefits processing. But the new system malfunctioned, forcing state workers to approve payments manually.
The agency has forced hundreds of employees to work around the clock to reduce the backlog, which has affected about 15% of claims filed since Sept. 1. Specifically, workers are checking claimants' eligibility before either approving or denying payment. In some cases, more paperwork is necessary.
But the delay has caused tremendous hardship to thousands of affected Californians, many of whom have fallen behind on rent, car payments and other bills.
In a memo to Sharon Hilliard, the EDD's chief deputy director, Marty Morgenstern, secretary of labor and workforce development, called the situation unacceptable.
Morgenstern noted the round-the-clock efforts by state workers but "even with these actions and others, it is unlikely that the claims backlog will be reduced quickly enough to respond to the very real financial hardship now being experienced by too many of our residents relying on timely payment of their UI benefits."
Loree Levy, in a statement late Tuesday, said the agency will begin paying all the backlogged claims "without any further delays."
The EDD, however, will later review the claims for a final determination of eligibility and seek reimbursement in case of overpayment -- the equivalent of "pay now, ask questions later."
The computer snafu is the latest problem to plague the EDD, which has been forced to reduce services in recent months because of federal budget cuts. The agency no longer answers its unemployment benefits hotline in the afternoons, and its regional jobs centers have lost some funding.
Loree Levy, a spokeswoman for the EDD, told The Times on Monday that officials expected some hiccups with the system upgrade "but we didn't know it'd be to this magnitude."
The recent problems are a black eye for the agency tasked with providing employer-funded benefits to the state's jobless. Legislators around the state, who are on recess, said their offices have been fielding calls and emails from residents who are not getting unemployment payments.