State furloughs may further delays for jobless benefits

Already frustrated jobless Californians may have a tougher time getting unemployment insurance benefits of up to $450 a week as of Friday when most state workers start taking off two days a month without pay.

Over the objections of the federal government, workers handling jobless assistance claims and appeals have been ordered by Gov. Arnold Schwarzenegger to go on furlough -- even though nearly all their salaries are paid by the U.S. Labor Department, and their days off will save the state very little or no money.

In a letter late last month, the department warned that furloughs could worsen the state’s current “below standard performance” in meeting criteria for the timely handling of unemployment claims and appeals.

Failure to comply with the department’s demands could violate Social Security laws, said the letter’s author, Richard C. Trigg, regional administrator in San Francisco of the Labor Department’s Employment and Training Administration.

The governor’s office said it was unmoved by the federal concerns.

The Schwarzenegger administration, which needs to fill a $42-billion budget deficit, says it has no choice but to furlough every worker it can without endangering public safety, including staff at the Employment Development Department and the Unemployment Insurance Appeals Board.

“Just like every family and business in California is doing, state government needs to tighten its belt in every way it can,” said Aaron McLear, the governor’s press secretary. “Savings from every part of state government will help to manage cash flow to get the state through this fiscal crisis.”

Schwarzenegger administration spokeswoman Camille Anderson contended that requiring staff to take pay cuts of about 10% -- by working on unpaid days and then taking compensatory days off either later that same month or sometime before the middle of 2010 -- would not hinder claims processing or appeals.

The Employment Development Department and the appeals board have been permitted to “self-direct” their staff furloughs to avoid having to shut down all operations on the first and third Fridays of each month, when Schwarzenegger has ordered most state agencies to close, she said.

The Labor Department strongly disagrees. Furloughs of people working on federally financed programs “will diminish assistance to the unemployed without saving any state dollars,” said spokeswoman Jennifer Kaplan in Washington.

Failure to pay benefits in a timely fashion and provide claimants with fair legal hearings could threaten more than $500 million the federal government annually gives the state to administer unemployment insurance programs, warned Maurice Emsellem, co-policy director for the New York-based National Employment Law Project, which advocates on behalf of mainly low-wage workers.

Those actions could make a bleak employment situation even worse. The state’s Employment Development Department is already overwhelmed with people trying to apply for unemployment assistance, and 68,800 pending appeals have swamped the state’s much-denigrated appeals board.

The federal government provides more than 90% of the funding for the two agencies, which have about 9,000 workers.

Any money saved by forcing those people to take off unpaid days “cannot be used to offset budget shortfalls” or any other purpose, the Labor Department told California in the regional administrator’s January letter.

Whether appeals board judges take time off on Fridays or any other weekday “will have the same effect -- delay and increasing backlog,” said a judge who asked to remain anonymous because he says the agency’s acting executive director has prohibited the staff from talking to reporters.

The same delays -- caused by workers staggering their unpaid days off throughout the month -- are expected to hit the Employment Development Department. A “good majority” of 300 One-Stop Career Centers, where the unemployed can use computers to prepare resumes and search job listings, will be shut Fridays because of the layoffs, spokeswoman Lorree Levy said.

The reduction in manpower at the Employment Development Department and the unemployment appeals board comes just as the fund for paying benefits ran out of money and borrowed $1.86 billion from the federal government.

Meanwhile, laid-off workers complain that they can’t reach operators at the state’s unemployment insurance call centers, even after dialing hundreds of times. Stressed clerks, who now have to worry about furlough-caused 10% pay cuts, type on antiquated computers that cannot fully process claims submitted online. Judges who hear appeals of denied claims are swamped by a nearly twofold jump in cases since July.

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marc.lifsher@latimes.com

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