Jobless benefits wrongly denied

Hundreds of thousands of jobless Californians last year appealed decisions of the troubled Employment Development Department, adding to months of delays in getting unemployment benefits.

After holding hearings, administrative law judges at the California Unemployment Insurance Appeals Board rejected many of the EDD’s cursory, highly technical decisions. They threw out or revised more than half of the earlier denials, belatedly awarding long-sought assistance of up to $450 per week.

The lengthy appeals added one more layer of woe for the state’s jobless to troubles at the EDD that included unanswered phone calls, glitchy computers and confusing paperwork.

Despite state pledges to improve the system, lawmakers including state Sen. Henry T. Perea (D-Fresno), chairman of the powerful Assembly Insurance Committee, are pressing for change.

“I believe that any process that yields the incorrect result half of the time is broken at a fundamental level,” the Fresno lawmaker wrote in a Jan. 27 letter asking the Joint Legislative Audit Committee to investigate.

The system “is plagued by payment delays, overwhelmed call centers and a frequently impenetrable bureaucracy,” he wrote. “We cannot afford to continue delaying claimants’ benefits to which they are entitled and creating more work for our over-stressed unemployment insurance system.”

Perea, who next week plans to ask for a formal state audit of the EDD, said he’s heartened that Gov. Jerry Brown’s administration says it “is stepping up to the plate and providing the funding necessary to serve unemployed Californians.”

EDD officials blamed understaffing and overwork for the big reversal rate -- along with incomplete applications.

New statistics obtained by The Times show a state agency slow to respond to calls for help but quick to withhold assistance to thousands of people.

Just ask bookkeeper Bob Rendon of Los Angeles, 53, who was, until recently, unemployed for seven months.

Tired of “a lot of excuses, a lot of runaround,” he said that EDD workers “say they care, but my overall impression is that it doesn’t appear they really mean it.”

Rendon recently got hired by an auto parts distributor seven months after being laid off from a restaurant.

For much of that time, he said, he wrangled with the EDD over missing payments and a $50 penalty assessed against him after allegedly failing to report one day of work income.

An appeals judge canceled the penalty in November. But Rendon said he had to wait about three months for a refund.

The delays created by lengthy application and appeals processes are just part of the agency’s many problems afflicting the people it’s supposed to serve, critics say.

The high number of reversed appeals “is an indication of how badly the system is being run,” said Cynthia Rice, director of litigation for California Rural Legal Assistance, which represents many low-wage workers before the state Unemployment Insurance Appeals Board. “They turn them down quickly.”

Rice and other labor lawyers who deal with the EDD say they hope that the department soon may improve its subpar customer service.

David Lanier, secretary of the Labor & Workforce Development Agency, told the EDD on Feb. 7 that the administration plans to spend more than $100 million to hire, rehire or retain more than 700 workers, pay them for overtime and contract with specialized computer experts.

The agency also wants to install a new phone technology called “virtual hold.” The feature, which is common at airlines and banks, allows callers to leave their number and get a call back, rather than be put on hold or disconnected.

Spokeswoman Loree Levy said the EDD expected to make “major gains” in its performance.

California’s unemployment insurance program was created in the 1930s to provide a safety net for workers who lost their jobs through no fault of their own.

As of December, 747,000 people were receiving benefits funded mainly from taxes on employers. California’s benefits last for 26 weeks, paying an average $302 a week and topping out at $450.

For many people deemed ineligible, dealing with the EDD has been a nightmare of missed payments and telephone calls that never get answered by a case worker.

That’s when some claimants with stamina or legal assistance file appeals. Statistics provided to the Legislature by the appeals board show that claimants win reversals of EDD staff decisions in more than half of all cases.

Judges overturned 163,375 appealed denials out of 296,030 -- 55% -- between July 1, 2012, and October 2013. The reversal rate rose to about 70% in cases in which the EDD said claimants did not comply with department regulations.

Other reasons for denials included a claimant not being available for work, voluntarily quitting a job without good cause, making false statements and receiving benefit overpayments.

Appeals judges declined to comment on the record because they are not authorized to speak out, but they shared some observations. Part of the problem stems from overworked and poorly trained case workers, who don’t ask the right questions and don’t listen to the answers, said an appeals board judge in the Inland Empire.

“They tend to be rather abrupt, rude even,” he said. “The training they get does not seem to be as good as it used to be.”

Another judge in Southern California complained that “the documents that EDD sends out ... are extraordinarily difficult to read.

“Combine that with ... a workforce that often misunderstands what people tell them on the phone, and you have a system that denies qualified claimants their benefits for months at a time until they can get a hearing with an administrative law judge. Sometimes it’s even longer. If the decision is entered incorrectly in the system, EDD still won’t pay benefits.”

The steep reversal rate is the latest worry on a heap of concerns about the EDD’s ability to efficiently do its job, said Assemblyman Perea.

The lawmaker and his committee staff have been scrutinizing the agency after a November oversight hearing into an EDD computer snafu that delayed payments for weeks and, in some cases, months for about 150,000 people.

The committee also is probing a dysfunctional EDD telephone system that hangs up on as many as nine out of 10 callers wanting to know their claim status.

The upshot, said Carole Vigne, a lawyer with the San Francisco Legal Aid Society, is that the jobless “are incredibly demoralized and frustrated.”

--

marc.lifsher@latimes.com

Twitter: @MarcLifsher