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California Lawmakers Blast Unemployment Agency Over Payment Delays

Out-of-work Californians and state lawmakers unleashed a torrent of criticism and frustration Thursday in a tense hearing over the Employment Development Department’s persistent failure to deliver unemployment insurance benefits, despite promises to do better.

(CN) — Out-of-work Californians and state lawmakers unleashed a torrent of criticism and frustration Thursday in a tense hearing over the Employment Development Department’s persistent failure to deliver unemployment insurance benefits, despite promises to do better.

Jennifer Cogan was among the dozens of people who flooded the Assembly budget committee’s public comment phone line Thursday to share stories of unprecedented hardship, of depleted savings and unpaid bills and of hours spent waiting on hold only to be hung up on by unemployment department staff who claim they can’t help. 

"I have heart palpitations when thinking of the emotional trauma I have endured at the hands of the dysfunction of the EDD,” Cogan said, adding that the initial sympathy she had for the overworked department "quickly eroded after my initial outreaches to EDD consisted of spending six hours on hold only after having a representative hang up on me when they did not know to answer my question.This happened multiple times. I have broken down and cried ad nauseam.”

The employment department has long been plagued with understaffing and outdated technology. But these struggles have been thrown into sharp relief by the Covid-19 pandemic and resulting economic collapse. 

Assembly member Tom Lackey, R-Palmdale, said, ”Many of the people in my district have had no income, no income since March. I am embarrassed, and I hope that members of the EDD are more embarrassed and that will trigger action. I don't think government has ever looked more broken than it has right now.”

The tenor of Thursday’s hearing was one of absolute disgust and vexation as lawmakers have lost all patience with the embattled department and its director Sharon Hilliard, whose answers revealed a puzzling incongruence with reality.

"Without using expletives I don't have the vocabulary to describe the frustration I feel on behalf of my constituents,” Assemblymember Adrin Nazarian, D-San Fernando Valley, said.

Assemblymember Cottie Petrie-Norris, D-Laguna Beach, grilled Hilliard over the agency’s limited call center hours and Hilliard’s reticence to offer a clear answer on why its main location is only open for a few hours in the morning.

“Why do you have case workers only working four hours a day?” she asked. “Many of the constituents in my district and around the state have had the experience of spending literally hours on the phone waiting for someone to pick up, and it's three in the afternoon they’re told ‘Sorry, our trained, actual caseworkers are only here from 8-12pm.’ That's not working around the clock and that's not acceptable customer service.”

Hilliard said the agency has one center with 8am to 8pm service, and that it is continuing to add fully trained case workers every day. 

Petrie-Norris questioned the truth of this assertion, since so many of her constituents have been unable to get through during those hours. When they do, they’re either hung up on or the representative cannot answer their question. Again, she asked when the department will have full around-the-clock service.

“You’re not in the room so you’re not seeing the number of eyes rolling and exasperated number of folks in the audience as you continue to fail to answer this question,” she said. 

Hilliard insisted that the department is working on combining its two call centers to provide full service from 8am to 8pm, seven days a week.

Petrie-Norris also skewered the department for call-back wait times lasting 4-6 weeks. Hilliard agreed that this is unacceptable. 

“We’re actually trying to get out of the business of call backs,” she said. “That's why we’re upgrading our call center so we can have fully trained staff from 8-8, one virtual call center providing service seven days a week.”


She said she didn’t know when that one consolidated call center would go online, but speculated that wouldn’t be until after mid-October. 

“These timelines seem out of step with the urgency of the moment we are in,” Petrie-Norris said, noting that the agency is just now appointing a single point of contact for each legislative office, something lawmakers requested in April. “This just exemplifies how slowly things are moving.”

The department has also been slow to handle its case backlog. Hilliard proudly announced that it has 239,000 cases awaiting resolution, a figure Assembly member David Chiu, D-San Francisco, disputed. He said there are at least 889,000 whose claims have not been addressed because the EDD “needs more information.” 

“Your online portal doesn’t tell the constituents what information the EDD needs,” he said. “EDD doesn’t send communication to the constituents that specify what information EDD needs. Our constituents cannot reach people through your call centers to tell you what you need. So how on Earth are these 889,000 Californians supposed to figure out how to resolve their claims?”

Hilliard said the agency has been sending email prompts to those who may be eligible for benefits but still need to answer some basic questions. 

“If people don’t go in and certify there is nothing we can do,” she said.

Chiu further accused the department of hiding the true extent of its backlog through conflicting statements to lawmakers and the press.

“Director Hilliard, why did you lie to us? Why have you been hiding this information from the public?" he asked.

"I would never lie to the public or the legislative body,” Hilliard said. “It has been a struggle for us to pull data, the way people want to hear the data is not the way our system was designed. It’s an old antiquated system.”

The computer system the EDD uses to manage its unemployment insurance program runs on the 30 year-old programming language COBOL. 

“I view this failure as predominantly an IT failure,” Assembly member Jay Obernolte, R- Big Bear Lake, said. "It’s horrifying to think about the fact that we have some of these systems still running in COBOL. In my day I was actually a pretty good programmer and I know COBOL, so if public service doesn’t work out for me, you should look me up.” 

Obernolte said the department should have a streamlined system to resolve problems without huge call centers. 

Hilliard agreed, saying the department will award a contract at the end of October “for a complete end-to-end replacement of our system.”

The EDD’s relationship with Deloitte, the vendor that built its online unemployment insurance system was also a sore point with Chiu. He noted that the EDD spent $259 million on no-bid contracts with the vendor over the last 10 years.

It was a debacle reminiscent of another massive tech project Deloitte spearheaded with the California judiciary during the height of the Great Recession, one that ended in the Legislature pulling funding after cost projections soared into the billion dollar range.

He said the EDD hired Deloitte to work on a project expected to take four years to complete and cost $47 million. The timeline stretched to six years and the cost ballooned to $94 million 

“That project massively failed, created massive delays in paid unemployment claims” he said, citing an Assembly insurance committee report from 2013. 

“I understand Deloitte continues to be a vendor of yours. Our office has met with Deloitte a few times. They claim no responsibility over anything that has taken place with your web-based systems. They say they’re not at fault for what’s happening, they don't have authority to fix things. Given how much you pay them I want to ask you what you think they actually do.”

Hilliard said Deloitte staff assists with maintaining the system, running the data and adding new features. Chiu said her answers contradicted the vendor’s. 

“They have abdicated responsibility and have given us answers that are the exact opposite,” he said. “And you keep signing new contracts with Deloitte. Why do we keep entering into no-bid contracts with someone with a history of cost overruns and problematic IT work?”

Chiu said the enormous amount spent with Deloitte represents another failure. “This vendor has also failed California. That’s a lot of UI [unemployment insurance] checks and because of the collective failure of EDD and Deloitte, millions of Californians haven’t gotten theirs.”

Thursday’s hearing follows Governor Gavin Newsom’s announcement touting the creation of a “strike team” to help the agency process unpaid claims and modernize its technology. 

Assemblymember Jim Cooper, D-Elk Grove, who chairs the budget subcommittee on state administration, noted the peculiar timing of the announcement, released just before the hearing was set to take place. 

 “I was pleased to see the government's announcement yesterday that he deployed a strike team to address the problems at the EDD,” he said. “The curious timing of the strike team announcement is not lost on the Legislature.”

Nazarian went even further, suggesting that the governor and the unemployment department were playing at political gamesmanship. He pointed to a link at the bottom of Newsom’s announcement that leads to a set of explanatory letters from the department that outlines corrective measures.

"It almost strikes me as a cloak-and-dagger game that we would play in elementary school in trying to say ‘I did this but it’s too bad that you didn't see it,’” Nazarian said. “It’s so unfortunate because there are people’s lives at stake.”

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Categories / Civil Rights, Government

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