It appears that a growing number of beleaguered and disillusioned Employment Development Department workers are hanging up their headphones and walking away in droves.
On Thursday, the department sent a letter that said nearly 110,000 jobless Californians could see their benefits reduced in the coming days.
Unemployment agencies across the country became lucrative targets for criminals when they were bombarded with claims last year as millions lost jobs due to coronavirus shutdowns.
A flurry of EDD reform bills have been submitted to the California legislature to fix, once and for all, EDD's inability properly serve millions of unemployed Californians.
The reforms to fix the California Employment Development Department are headed to the legislature for approval. Tom Vacar reports.
California's Employment Development Department was called on the legislative carpet as more claims come in and the once shrinking backlog of old claims grows again.
California State Auditor Elaine Howle said the agency was slow to react to warnings of an increase in fraudulent claims, saying this inaction cost the state billions as criminals exposed weaknesses in the system.
An assembly subcommittee overseeing the Employment Development Department, got an earful when EDD went so far as to claim that its old backlog has been cleared up.
Auditor Elaine Howle told the governor that as a result, more than 800,000 people waited longer than 21 days—EDD's measure of how quickly it should process a claim—to receive their first benefit payments.
Criminal rings stole over $11 billion in unemployment benefits from California last year and nearly $20 billion more is considered suspicious.
Unemployed workers with legitimate claims have had their accounts frozen by the department, sometimes for months, as part of an anti-fraud crackdown.
California may have paid out nearly $10 billion in phony coronavirus unemployment claims — more than double the previous estimate — with some of that money going to organized crime in other countries.
California’s Employment Development Department has been an easy target for fraud, but the agency keeps fighting to crack down on bogus claims.
Many California jobseekers are confused about withholding taxes on their unemployment checks, and many more report that they simply can’t afford to put aside any money when they don’t have enough to begin with.
The state Employment Development Department on Wednesday said it had examined existing claims from people who said they lost their jobs during the COVID-19 pandemic and found about 3.5 million claims were “potentially fraudulent.”
More than $40 million in California funding intended to help people left jobless by the coronavirus pandemic probably went to inmates in out-of-state jails and prisons, officials said.
During the pandemic, the EDD has been hit by massive fraud, including $400 million in jobless benefits, paid to jail and prison inmates.
Well over 1.1 million new unemployment claims just last week, down only slightly from the previous week but well over any other we experienced in the Great Recession.
The department also has been criticized for granting payouts on hundreds of thousands of fraudulent claims, including some in the name of U.S. Sen. Dianne Feinstein. The state has acknowledged that it has paid about $400 million in the names of prison inmates.
An employee with the California Employment Development Department said thousands of fraudulent unemployment claims are being processed because of lax management, little oversight and an inability to properly flag suspicious claims.