California EDD system taking “two week reset period” amid massive backlog, fraud


Chris Torres

California’s Employment Development Department will be taking a two week reset period to process backlogged claims as well as fraudulent cases, according to Gov. Gavin Newsom.

Emily Holshouser, Assistant News Editor

Gov. Gavin Newsom announced on Saturday that the Employment Development Department in California is taking a “two week reset period” to address a massive backlog and reports of fraud.

During this time, new claims will not be processed and applicants will be redirected to a temporary website where they can input their personal information and be alerted once the system is taking new claims again. Already-open claims will not be affected.

The report acknowledged that the backlog may not be completely fixed until Jan. 2021. Unemployment claims will likely reopen on Sept. 30.

In July, Newsom assembled an EDD “strike team” co-headed by Yolanda Richardson, Government Operations Agency Secretary, and Jennifer Pahlka, co-founder of the United States Digital Response, the U.S. Digital Service and Code for America, to create solutions to address the backlog and fraud.

The solutions presented by the strike team on Saturday include a new identification process that will reduce manual claims, as well as a restructuring of staff so that experienced employees can handle more complex claims.

The report pointed to enormous increases in daily claims, which crippled a 30-year-old system not meant to handle more than a couple thousand claims per day. Experts and state employees have acknowledged that the system has desperately needed improvements prior to the pandemic.

There is currently a backlog of 600,000 Californians who applied for unemployment more than 21 days ago whose claims have not been processed, according to a press release from EDD.

The report found that during the week of Aug. 22, the system processed more than 60,000 electronic claims per day on average, around 20,000 of which had to be manually processed. Before the pandemic, the system averaged about 2,300 manual claims per day.

Many of the claims that created this backlog had to be handled manually for identity verification. The department will implement new identification processes for claimants which will prevent claims from being flagged for manual verification unless absolutely necessary.

The EDD believed fraud was the culprit for the increase in claims, leading to the audit. Some people have reported receiving mail from EDD, despite the fact that they did not apply for unemployment insurance.

This month, the Beverly Hills Police Department arrested 44 people and seized 129 EDD credit cards obtained using stolen identities, according to a statement released by the police department. The insurance on the cards amounts to over $2 million.

Newsom said in a briefing on Monday that the antiquated EDD system needed to be “strewn to the waste bins of history” and that these improvements have been necessary.

An EDD press release from Thursday said that the state of California has issued more than $86 billion in benefits and processed an estimated 13 million claims since the beginning of the pandemic in March.