State lawmakers once again hauled in leaders from the California Employment Development Department to answer questions about the state’s handling of unemployment claims during the pandemic.
A bipartisan group of lawmakers channeled frustrations from unemployed constituents at the Assembly Budget Subcommittee hearing Thursday, while EDD director Sharon Hilliard defended her department’s efforts to keep on top of historic benefits claims.
The unemployment system has been walloped by millions of applications from jobless Californians since the start of the pandemic. The department says it has processed over 9 million claims since March, the majority of which are for traditional unemployment benefits. In that time, the department has distributed $55 billion in benefits.
But lawmakers say there’s a backlog of roughly 1 million unprocessed claims, and it’s the most frequent complaint they hear from constituents. And with the $600 weekly benefits add-on from the federal government set to expire soon, there’s increased urgency to fix the department’s shortcomings.
“EDD has been failing California,” Assemblyman David Chiu (D – San Francisco) said. “Our constituents are depleting their life savings, going into extreme debt, having trouble paying rent and putting food on the table.”
Hilliard acknowledged that EDD’s system needs improvement but says her department has done its best to ensure jobless Californians received benefits.
Meanwhile, Governor Gavin Newsom announced the formation of a “strike team” to improve the state’s ability to process unemployment benefits and consult on an overhaul of the department’s technology.
Lawmakers Want Answers
Demands on the state’s unemployment benefits system are at a historic level.
Under normal conditions, about 50,000 Californians apply for unemployment insurance each week, according to the nonpartisan Legislative Analyst’s Office. Since March, the weekly average has shot up to 400,000.
Over 4 million workers statewide are receiving unemployment benefits, representing more than 20% of the labor force.
The federal government also established the Pandemic Unemployment Assistance program, which extended benefits to independent contractors and those who are self-employed, adding to the demands on the department.
But Democratic and Republic lawmakers say the department is “failing” jobless Californians in their time of need.
“[Californians] have been banging their heads against a bureaucratic wall just to get just trying to get the money to pay their rent, to feed their families and to keep their finances afloat,” Assemblyman Jay Obernolte (R – Big Bear Lake) said.
Hilliard says she recognizes the shortcomings of EDD in recent months to help Californians with applying for benefits and answering questions about their claims.
“We realize that the current call center operations are not currently serving all our customers in a timely manner,” she said during the hearing.
But she said the department is trying to improve.
EDD expanded its call center availability to 12 hours a day, seven days a week, and transitioned 1,300 state employees to the EDD’s unemployment claims division. The department is also in the process of hiring and training over 4,500 additional workers.
Obernolte encouraged EDD to view lawmakers and their staff as allies in the effort to get Californians benefits and answer their questions.
“We can be your eyes and ears in our districts,” he said.
During public comment, numerous out-of-work Californians called in to express frustration with the claims application system. Some said they called EDD hundreds of times, only to be put on hold for hours and at times hung up on.
Multiple EDD employees also called in to say they’re working their hardest, but the department runs on outdated technology and remains short staffed.
“We have been screaming for updated staffing [and] more staffing for years, and our pleas have fallen on deaf ears,” said one EDD employee who called in to the hearing.
Another day, Another Strike Team
Governor Gavin Newsom has appointed strike teams to overhaul the DMV, revamp beleaguered utility PG&E, and fight COVID-19 in the Central Valley.
Newsom added another one to the list on Wednesday to tackle the EDD’s struggling system for processing unemployment insurance claims.
The new strike team will “create a blueprint for improvements at EDD, including a reimagining of their technology systems,” according to a press release from the Governor’s office. It will be headed by Government Operations Agency Secretary Yolanda Richardson and Code For America founder Jennifer Pahlka.
“There should be no barriers between Californians and the benefits they have earned,” Governor Newsom said in a press release. “Unprecedented demand due to job loss during this pandemic paired with an antiquated system have created an unacceptable backlog of claims. Californians deserve better, and these reform efforts aim to move the Department in that direction.”
At Thursday’s hearing, multiple members suggested that a strike team could only do so much and that systemic changes at the department had to come from within EDD.
“You’ve been there 37 years, what can a strike force tell you that you shouldn’t know already?” asked Assemblyman Jim Cooper (D – Elk Grove) of Hilliard, a longtime state employee.
“Well, everybody brings something to the table,” said Hilliard.
In November, EDD plans to award a contract through a traditional bid process to overhaul the benefits processing system, which the strike team will help advise. EDD did not immediately respond to a request for more details about the scope and cost of the overhaul effort.
EDD’s system uses a computer programming language called COBOL, which was developed over 60 years ago.
In 2012, EDD awarded a contract to multinational consulting firm Deloitte to improve its benefits processing system. The effort ballooned to $110 million — nearly twice the original estimate from the state.
Hilliard said while the undertaking was significant, it was a “bolt-on” improvement to the department’s legacy system.
In recent months, the EDD issued about 16 million dollars in no-bid contracts to Deloitte to augment the state’s existing unemployment claims system.
The move has come under scrutiny from some lawmakers.
“If they haven’t even given you a project plan with actual timelines,” Assemblywoman Cottie Petrie-Norris (D – Laguna Beach) said, “I think you need to ask for your money back.”
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