Changes at California’s unemployment agency don’t do enough to address problems, lawmakers say

California’s new unemployment benefits application system is experiencing long wait times, and tens of thousands of jobless people who signed in did not complete the process in its first six days, many likely because they were unable to, state officials said Wednesday.

The findings drew concern from state lawmakers who said improvements made by the Employment Development Department don’t do enough to address the agency’s problems.

The new online system to expedite applications for benefits and verify identities was installed in response to complaints that the EDD’s former process was ineffective, plagued by jammed phone lines and computer glitches, leaving a backlog of 1.6 million applications that had not been approved as of last month.

A “strike team” appointed by Gov. Gavin Newsom indicated two weeks ago that the last remnants of the backlog would not be eliminated until the end of January, and recommended changes including the switch to the new identity verification system provided by a private vendor.

Since it became available last Thursday, the EDD’s ID.me system was accessed by 101,159 people seeking to file a claim, and 64%, or 64,950 people, were able to verify their identity online by late Tuesday, according to the agency.

Of those people, 6,035 needed help from a “referee” in a video chat, the agency said.

An additional 36,209 people who signed on to the system did not verify their identity or talk to a referee for reasons that the agency said could include abandoning the screen at a point where further action is required, timing out, or not being able to establish their identity.

During a legislative hearing in Sacramento on Wednesday, Assemblyman David Chiu (D-San Francisco) reminded EDD Director Sharon Hilliard that agency officials said last month that the new system would allow 91% of claims to be automatically verified. He noted that he is concerned that only 64% of those who signed on had achieved verification by Tuesday.

“That’s a very big difference,” Chiu said. “I’m not persuaded that this is actually moving things faster.”

The agency said some people seeking help from the ID.me call center may have also given up because of “longer-than-average hold times Monday that reached at one point over an hour.” Others who did not follow through on applications may have been trying to file fraudulent claims, the agency said. Applicants have up to a week to complete the process.

“It’s too soon to draw firm conclusions about why those who did not verify their identity were unable to make it through the process, but we will be looking at this data carefully in the weeks ahead to make sure there are no barriers,” Hilliard said. “On balance, we think this tool is already more effective and provides better access to a wide range of Californians than our previous method of verifying identity.”

EDD officials urged patience given the initial rush of applications to the new system and said the best time to get phone help is before 10 a.m.

The agency said it sent emails and texts last week to 136,000 people who signed up for a notification indicating when they could submit new unemployment claims, but almost 36,000 had not tried to sign in to the new system by the end of Tuesday.

Hilliard said the agency will evaluate the new system after two weeks and “continue to refine this new process and smooth the way for applicants.” She told legislators that her agency has so far implemented 22 of 111 recommendations of the strike team.

The agency stopped accepting applications during the two weeks before the new system began operating, and Hilliard told legislators Wednesday that by reassigning experienced staff, the agency was able to resolve about 246,000 claims in the backlog.

Republican Assemblyman Jim Patterson of Fresno said the agency is still not doing enough.

“The ID.me [system] does nothing to help the hundreds of thousands of people still waiting to have their identities verified,” Patterson said Wednesday. “These folks are trapped in the old backlogged system that won’t be cleared until January 2021 at the earliest.”

Some residents who have waited months for approval of claims held a press conference in front of EDD headquarters in Sacramento to demand swifter action, including April Carlton of Citrus Heights, who was furloughed from an office manager job.

Carlton said EDD denied her claim based on a name change in 2018. She provided the agency with judgment orders for the name change, immigration papers and proof of residence, but is still waiting for backdated payments.

“Thank God for the support of my family,” Carlton said. “Without them, I would not have been able to handle this financially straining and emotionally infuriating process.”

Sen. Jim Nielsen (R-Tehama), who joined those at the event, said the backlog to review old claims has increased from eight weeks to 11 weeks.

“The experiences of out-of-work Californians and EDD’s lack of action are shameful,” he said.

California’s unemployment benefit system has been overwhelmed with an unprecedented 13.6 million claims since the state ordered residents to stay at home in March to reduce the spread of the coronavirus, causing many businesses to close or scale back hours and services, and putting millions out of work. The state has so far paid out more than $90 billion in benefits, but many said they have waited months without getting any help.

Yolanda Richardson, head of the strike team and secretary of the state Government Operations Agency, said in testimony to legislators Wednesday that the new system appears to be allowing people to file claims more quickly and easily, and is reducing the number requiring manual processing.

The strike team report issued Sept. 19 found that the EDD needed to change an internal culture that is delaying approval of legitimate claims based on fears of fraud. Agency officials told the strike team that they believed fraud is involved in tens of thousands of claims from people who have not responded to identity verification requests.

Hilliard told lawmakers Wednesday that she could not estimate how much money has been lost to fraud, but Assemblyman Jim Cooper (D-Elk Grove), a retired sheriff’s captain, estimated unemployment fraud is “conservatively in the hundreds of millions if not a billion dollars.”

Assistant Chief Marc Coopwood of the Beverly Hills Police Department told lawmakers at the hearing that his agency has arrested more than 100 people for unemployment fraud in the last 60 days, confiscated 200 EDD-issued debit cards potentially worth up to $4 million in benefits, and seized $500,000 in cash, with those charged coming from as far away as New York and Georgia.

Hilliard told lawmakers that 669 claims have been suspended because of lack of verification of identities, 75 fraud investigations are underway, and additional review is being conducted of 358,000 debit cards issued with payments.

State lawmakers voiced concern that the action could deprive legitimate applicants of access to money they need to pay for rent and groceries.

Chiu complained to Hilliard that only 27 of EDD’s 9,000 employees are devoted to investigating fraud.

“It strikes me as bureaucratically, criminally negligent that under your leadership there has not been more devoted to this fraud if potentially billions of dollars are being stolen from the people of California,” Chiu told Hilliard.

She disputed the criticism, but added: “I think we can always do more.”