California’s unemployment agency targeted for audit as criticism grows

A job seeker waits to use a phone at a career center in Richmond, Calif., in 2009
A job seeker waits to use a phone at a career center in Richmond, Calif., in 2009. The state Employment Development Department are facing a barrage of complaints that it is failing to respond to the flood of claims filed during the coronavirus pandemic.
(Justin Sullivan / Getty Images)

California’s unemployment agency faced a barrage of bipartisan criticism from lawmakers this week over continuing delays in approving jobless claims, with calls for an audit and for Gov. Gavin Newsom to step in with new, corrective action.

The renewed complaints come as the state Employment Development Department reported Thursday that it has processed 6.7 million claims for unemployment benefits since March 14, just before Newsom declared a statewide coronavirus emergency, and has paid $33.5 billion in benefits.

Lawmakers including state Sen. Scott Wiener (D-San Francisco) say their offices have been flooded with calls from constituents who filed claims weeks or months ago who have not gotten approval or received any money. Callers also continue to have trouble getting an EDD representative on the phone to help them with stalled claims, legislators say. The issues have existed for months despite promises by the state to resolve them.

“It’s bad,” Wiener said in an interview. “We are now 3½ months in and it’s gotten worse. It’s just an unacceptable situation.”


The Senate Democratic Caucus conveyed that message to the Newsom administration and has received assurances that the problems will be addressed, Wiener said. In addition, he and Assemblymen David Chiu and Phil Ting, also San Francisco Democrats, sent a letter to state Labor Secretary Julie Su last month saying they have “serious concerns” about the failure of the system to respond to unemployed Californians.

“It is infuriating to hear stories of constituents going into debt to stay afloat because they have yet to receive any benefits from EDD,” Chiu said Thursday. “We have to do things differently. Californians need relief now.”

He said in a series of social media posts that even his staff has been told that they can now only expedite one constituent case involving significant hardship a week, and it is taking four weeks to respond to the lawmaker’s staff in other situations.

Assemblywoman Sabrina Cervantes (D-Riverside) said that of the active cases being handled by her staff, 40% applied for benefits in March and April and still have not heard back or received benefits months later.

Newsom acknowledged the continuing concerns again this week, noting the EDD has received an unprecedented 6.7 million new claims in a short period of time.

“That is not something the state has ever had to do in the past, and I am proud of the work they have done under very difficult circumstances,” Newsom said Monday. “We have not been shy about being honest about the frustrations we have all shared, the thousands of people we had to get redeployed to help support those phone lines dealing with the magnitude of the call volume.”

Newsom’s office deferred comment to the EDD on the new complaints by legislators, but at the news conference earlier in the week the governor said the problems in the system are getting attention from state officials.

“All these areas are opportunities to do more and do better, but I am very proud of the team for being able to meet the moment overwhelmingly and to advance some best practices for the rest of the nation,” the governor said.


One component of the state budget deal agreed to by Newsom and Democratic legislative leaders would extend unemployment benefits for another seven weeks and allow the state Department of Motor Vehicles to provide identifying information to help the EDD ensure compliance with unemployment rules.

EDD spokeswoman Loree Levy said data is not available on how many claims have been rejected or are still pending resolution of issues including verification of identity. Most claims are processed within 21 days, she said.

“Others will always take longer than three weeks, whether we are in a pandemic or not,” Levy said. “This is the case for every state as we abide by regulations of this federal-state program.”

Claims that take longer include those in which the EDD has to verify a claimant’s identity before it can release wage records associated with a person’s Social Security number, wage information that doesn’t match employer-reported records, and mistakes or missing information on applications, Levy said.

“These claims have to be worked manually by staff,” she said.

Levy said the EDD recently announced plans to hire 4,800 more people to help process claims and so far 1,200 of them are on the job, while 1,400 job offers are being finalized and about 500 others have conditional job offers while the agency awaits results of background checks.

Assemblywoman Laura Friedman (D-Glendale) said that after the EDD sends letters to benefits applicants asking them to verify their identity, claimants are responding right away. But some have reported that their claims have been disqualified because of the amount of time EDD is taking to process their proof of identity. Others have waited two months for a response.

“This has become a full-scale crisis in my district,” Friedman wrote in a letter to Newsom on Thursday. “Delays in identity verification are placing an unimaginable burden on people whose lives have been upended by the pandemic.”

Terrence Taylor, a corporate trainer and musician who filed a claim for benefits on March 22, provided proof of identity when requested in April and has still not received any payments. He has enlisted the help of his state senator and has resubmitted proof of identity after first being told he failed to do so and therefore was disqualified.

In the meantime, he has had to give up his residence in Long Beach, requiring him to stay with various friends, and is facing other pressing bills that he cannot pay.

“It’s dire,” he said. “I’m exasperated.”

Assemblyman Todd Gloria (D-San Diego) took to Twitter this week to complain that many of his constituents also have yet to receive any benefits.

“It’s inexcusable, and I am calling on the Administration to take corrective action,” Gloria said.

Last month, more than 8,000 Californians who filed new claims for unemployment benefits rated their experience as “poor” or “very poor,” according to a state survey, but the vast majority of respondents — 76.5% — gave a rating of “good” or “excellent,” according to the EDD.

Taylor questioned the accuracy of the survey results, saying his experience was “extremely poor.”

David Goldfarb of Vallejo said EDD operators have either hung up on him repeatedly or failed to answer when he has tried to call about his benefits, which he has not received despite being told his claim has been certified.

“This program is truly a failed state operation,” said Goldfarb, who does maintenance for restaurants. “People are out of work and can’t pay their bills. In my own case, I have run up many thousands of dollars in credit card debt just to buy food and other necessities.”

Assemblyman Jim Patterson (R-Fresno) cited such complaints in requesting a state audit of the EDD to look at issues including the failure of the phone system and computer technology to handle a large amount of traffic from jobless Californians.

Other legislators have indicated they would like to sign on to the request before it is acted on in August by the Joint Legislative Audit Committee, on which Patterson serves, a representative said.

Patterson said the EDD has had technology problems for more than a decade, but the problems have worsened during the pandemic.

The lawmaker said in a letter to the committee that he recently met with a representative of Deloitte Consulting, a private firm given an EDD contract to assist with the call centers.

Patterson said he was told that during one week in May, 1.5 million phone calls were received from 600,000 callers, but only 150,000 people were able to speak to a live person.

“People are in desperate need of help and to know that 75% of them in a given week can’t get through to the EDD is unacceptable,” Patterson said Thursday. “Without that person-to-person phone call, many are left hopeless with no other options. It’s another glaring reason why the EDD needs a deep-dive audit.”