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California jobless claims resume rise as EDD poises for pause

Unemployment claims in California resumed their upward march last week, pushing the overall total to more than 8.8 million workers seeking benefits since coronavirus-linked business shutdowns began in mid-March.

An estimated 230,400 workers in California filed for unemployment benefits during the week ending Sept. 19, which was 4,000 more than the 226,000 claims filed in the week ending Sept. 12, the U.S. Labor Department reported Thursday. The latest unemployment numbers showed an increase because claims filed in the Sept. 12  week were revised downward.

The huge numbers of jobless claims have arrived at a time when the state’s Employment Development Department is preparing to halt for two weeks processing any new claims until the agency can chip away at a mountain of unpaid benefits the agency has failed to pay.

The two-week “reset” from Saturday until Oct. 5 was included in recommendations from a “strike team” established by Gov. Gavin Newsom in July following months of growing criticism from state lawmakers and the public. For months, unemployment benefits have not been paid to thousands of claimants, the agency’s staff has been difficult to reach by phone, computer systems have failed, and criminals are using stolen Social Security numbers from corporate data breaches to fraudulently obtain EDD benefits.

“We are committed to getting this done,” Newsom said at a news conference Monday. “We recognize the magnitude of the responsibility and the challenge we have in front of us.”

“We are in this for the long haul,” Sharon Hilliard, director of the state Employment Development Department said in a statement. “The strike team’s recommendations provide an opportunity to pivot and improve our systems.”

The employment department said Saturday that roughly 591,000 Californians are still waiting for initial unemployment claims filed more than three weeks ago to be processed. Some 1 million other people have received some form of payment, like an initial check, but have modified their claims with no response.

Fixing the problems won’t come quickly, however. The backlog of claims is growing by 10,000 a day, the strike team report found.

A hotline the department set up for the public receives 6.7 million calls a week. But there are only 20 employees to answer the calls, the strike team said.

“We can safely estimate that no more than 1 in 1,000 people that are trying to reach this call center on a given day are getting through,” the strike team report found.

To tackle the backlog, the most experienced EDD staff members will be shifted to working through the oldest and most complex claims, Hilliard said. In addition, some of EDD’s new staff members will be redirected to processing mail and email items and calling applicants for additional information needed to resolve issues on older cases. The agency will also install a new online identity verification tool in the next two weeks to reduce fraud.

The agency said it expects to eliminate the backlog of unemployment claims in four months, by January 27. Some critics of the department weren’t impressed with the moves.

“This is too little too late for some Californians who have been waiting for benefits since March,” said Assemblyman David Chiu, D-San Francisco, who has pressed the agency for more accountability.

“Every day my staff and I hear from constituents who have depleted their life savings, gone into extreme debt and now are struggling to pay the rent and put food on the table,” he said. “The fact we have the money and can’t get these checks out is enormously frustrating.”

The EDD said the two-week delay will only affect people who are applying for benefits for the first time. During the two weeks, people who are looking to submit a new claim for unemployment insurance benefits online will be redirected to a temporary page where they can submit their personal information.

Because new claims will be backdated to cover the rest period, the agency said claimants should able to certify their benefits more quickly. The EDD also will expand the capability of the new Document Upload feature for mobile users and allow for people to provide wage information and file military and federal employee claims online.

Also, Californians who already have established claims will still be able to use their online accounts during the two-week “reset” period to manage existing claims and monitor their claim activity and payments.

Newsom said Monday that the employment department’s antiquated computer systems run on 30-year-old Cobol programming.

“It needs to be upgraded. Frankly, it needs to be simply strewn to the waste bin of history,” he said. “But nonetheless, we inherited that waste bin and as a consequence, we’ve been trying to patch it together.”

The department has been in a similar place before, a decade ago during the Great Recession.

Newsom called the backlogs a “wake up call” and said other states face similar aging mainframe computer systems. The report notes California is performing better than many of states with the mass of new applicants seeking unemployment insurance.

“As a nation, we have a huge IT problem,” he said. “We must completely reimagine our approach to large scale IT procurement.”

In a letter to Newsom Friday, Hilliard noted that the employment department had staffing levels in February “that accompany a 3.9% unemployment rate and was not prepared for the dramatic increase in unemployment we saw in March.”

California’s unemployment rate last month was 11.4%, down from 13.5% in July.

Source: Orange County Register

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