Outdated Tech Blamed for California’s Bungling of Jobless Claims

Unionized hospitality workers apply for unemployment benefits at the Hospitality Training Academy Friday, March 13, 2020, in Los Angeles. (AP Photo/Marcio Jose Sanchez)

SACRAMENTO, Calif. (CN) — Blaming outdated technology for California’s letdown of jobless residents in the midst of a pandemic, California Governor Gavin Newsom on Monday said changes underway at the state Employment Development Department should clear an alarming 600,000-case backlog by January.

Newsom said the seeds for the current failures were planted under former governors and that California — along with the nation as a whole — must “reimagine” its information technology systems. 

“We inherited an old, dilapidated system not dissimilar to many other states in this country,” Newsom said during a press conference. “It’s a wake-up call for this nation, not just the state of California, to substantially make progress in terms of large-scale IT procurement.”

Swamped by millions of legitimate and fraudulent unemployment claims, the department has buckled, leaving scores of Californians without an income over the last six months. Unable to keep pace with widespread layoffs and double-digit jobless rates, the department’s inability to provide unemployment benefits has tarnished the Newsom administration’s pandemic response.

State lawmakers have lost patience with the department and routinely blast it for creating a backlog that is growing by at least 10,000 claims per day.

“Many of the people in my district have had no income, no income since March,” said Assemblyman Tom Lackey during an emergency oversight hearing in July. “I don’t think government has ever looked more broken than it has right now.”

The Legislature has since approved a state audit of the department, expected to begin this month.

The bipartisan pressure from the Legislature spurred Newsom to hire an independent “strike team” to identify and propose fixes for the department’s embarrassing shortcomings. The strike team’s much anticipated findings were released shrewdly over the weekend in a late-evening news dump.

In a 109-page report, the strike team urges the department to immediately stop processing new claims until Oct. 5 and implement a new system that will more quickly and accurately authenticate claimants’ IDs. The report also recommends the department shift its most experienced employees to complicated cases and make it easier for people to access and submit forms from their cellphones.

Though it may take several more months, the report says the department should be able to get back on track by the end of January.

“When the strike team started, the backlog was growing unbounded. Soon the growth will stop, and while there is much work left to do, this year and for many years in the future, the department now has new tools to help them understand and manage down the backlog,” the report states.

The announcement of the two-week pause and the unveiling of the massive backlog didn’t sit well with either Democrats or Republicans.

“The report revealed that at least 1.6 million Californians and counting have unfulfilled benefits claims,” said Assemblyman David Chiu, D-San Francisco. “I am concerned this is too little, too late.”

Republican state Senator Melissa Melendez, who along with others pushed for an investigation into the department, was also unhappy with the new timeline touted by Newsom and the strike team.

“Californians deserve better than the crumbs this governor is throwing them,” Melendez said in a tweet.

Since the pandemic began, the state has processed a staggering 13 million claims totaling over $86 billion. The number of processed claims in 2020 more than triple the yearly high-water mark of the Great Recession.

Aside from inferior technology slowing cases, the report contends workers have been forced to dedicate an inordinate amount of time fighting fraud and identity theft.

Opportunistic organized crime rings have targeted California in recent months and the department says its investigations have led to dozens of arrests since August, most notably an incident in Beverly Hills where fraudsters allegedly took the state for over $2.5 million. The department says the suspects were mostly from out-of-state and used the debit cards to eat at fancy restaurants and rent luxury cars.

By updating its identity authentication process, the task force says legitimate claims won’t get pushed aside by distracted employees as often as they currently are.

Newsom hopes the report will lead to the department gaining back the trust of Californians in the near future.

“We’ll be transparent with you and others in real time over the course of weeks, not waiting months for the results of these efforts,” Newsom said. 

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