California to pause unemployment claims for 2 weeks

California will not accept new unemployment claims for the next two weeks as the state works to prevent fraud and reduce a backlog as more than 2 million people are out of work statewide during the coronavirus pandemic.

Nearly 600,000 Californians are part of a backlog where their unemployment claims have not been processed by the state's Employment Development Department for more than 21 days, the state said in a news release released late Saturday. There are also 1 million cases where residents received payments but are awaiting a resolution to their modified claims.

The Employment Development Department has been hampered throughout the pandemic by outdated technology at a time when California is seeing an unprecedented wave of unemployment claims. While the department estimates that about 2.1 million residents were out of work statewide last month, California’s unemployment rate fell to 11.4% in August, down from 13.5% in July.

Anyone who files new claims until Oct. 5 will be asked to provide contact information so the Employment Development Department can reach out after the two weeks is over. Californians who are already in the unemployment system are not expected to see an interruption in their payments during the two-week period.

The state has 1.6 million pending unemployment claims that still need eligibility verification, according to the Sacramento Bee. Officials officials do not expect that to be resolved until late January.

The state plans to implement a new online identity verification tool during the two-week period that would reduce the number of claims needed to be processed by hand and potentially reduce suspected fraud.

“New claimants should not see a delay in benefit payments, and in fact many of them will actually get their payments faster as they avoid the older time-intensive ID Verification process,” Employment Development Department Director Sharon Hilliard wrote in a letter dated Friday to California Gov. Gavin Newsom.

Hilliard's actions, including the two-week pause on new claims, stem from recommendations made by an unemployment “strike team” that was appointed by Newsom in July. The governor wanted the team to address the current unemployment issues from the pandemic, as well as consider long-term solutions to get the department better suited for future economic downturns.