SAN FRANCISCO - More than a million pandemic relief recipients are facing harsh collection tactics as the California Employment Development Department tries to claw back money it paid out in federal pandemic relief. This will scare many recipients and bankrupt an untold number of them.
Months after they received their checks, the EDD wants 1.4 million unemployment recipients, mostly for federal pandemic relief, to provide proof that they are eligible and entitled to the money they received.
"Previously, only people who were W2 workers largely were able to obtain unemployment insurance," said labor lawyer and former EDD Director Michael Bernick.
Many recipients, freelancers or small business owners, who received pandemic relief, say they don't have specific documents that can definitively prove they were seeking work or working; documents that were not required when relief was granted in the Trump administration.
"This was a very poorly-designed program and it had very lax standards, very lax protocols. People want to attack EDD, but these decisions in state government and federal government were made elsewhere. It's not EDD that was responsible for how this money went out," said Bernick.
If they can't prove it, the EDD wants the money back, in some cases as much as $30,000, either voluntarily or forced collection through garnishment, property liens, reducing other benefits or court actions. The state has been stung and severely criticized for writing $20 billion in checks to fraudsters, but blames federal requirements for the claw back policy.
The former EDD director says most of these 1.4 million claims probably are legitimate.
"Most of the people would be eligible given these very lax standards and those that may not be eligible, it's largely a case of confusion in terms of not intending to defraud the government," said Bernick.
Though people have a right to appeal through a so-called trusted referee, the overwhelmed EDD still has trouble picking up the phone.