Blistering EDD report details problems with unemployment aid

Delays, improper denials and a nonresponsive call center. Latest report details problems with EDD

Updated: 5:03 PM PDT Aug 9, 2022

Ensuring eligible Californians received their benefits during tough economic times — including the COVID-19 pandemic — was not among the Employment Development Department’s “top priorities,” according to a blistering new report released from the state Legislative Analyst’s Office on Monday.(Video above: Top headlines for August 8, 2022)The EDD, which manages the state’s unemployment insurance program, was criticized for delays, improper claim denials, and a lack of emphasis on ensuring eligible workers can easily get their benefits.In the 20-page report, nonpartisan advisors said EDD delayed payments to nearly 5 million workers during the COVID-19 pandemic and improperly denied payments to an estimated 1 million people during the same period.This is a problem KCRA 3 Investigates has covered extensively since the pandemic was declared in March 2020. Now the LAO has outlined the reasons why all of this happened and offered the following recommendations:Limit improper claim denialsAccording to the report, more than half of the UI claims the EDD denies are overturned on appeals, which has led to a lot of extra time and money being spent to deny claims that are actually deemed legitimate.It further stated that likely between $500 million and $1 billion annually in UI payments go unpaid each year due to improper denials.The LAO suggested an audit to learn why this is happening.Minimize delaysMore than half of UI claims were delayed during the peak of the pandemic for many workers by several months. Between 15% and 20% of workers who apply for UI during normal economic times experience delays.The report suggested EDD review its identity proof requirements which can cause delays and consider a surcharge to discourage unsubstantiated employer appeals.Simplify ApplicationThe report found that the requirements are hard to understand and are “unnecessarily lengthy.”The LAO said EDD should stop asking workers for information it already has and require employers to report layoffs to speed up the process.Conclusion from the report “Despite its importance to workers and the economy, the UI program faltered during the Great Recession and the pandemic. This caused hardship for unemployed workers and their families, held back the economic recovery during both periods, and spurred frustration among Californians with their state government. These failures trace back to the UI program’s basic design, which has encouraged EDD to adopt policies and practices that make it unreasonably difficult for eligible workers to get benefits. Although these problems are not new, the pandemic has highlighted the need for the state to rebalance the UI program in ways that make getting benefits to eligible workers a top priority.Some of the changes we suggest in this report could be made quickly to immediately improve the process of getting benefits. Narrowing the instances when former employers can contest a worker’s claim is one example. Other changes we put forth here will take time to develop and implement and require broad participation from businesses, workers, and the department. Simplifying the application for UI benefits is an example of a more involved, substantial change. Given these differences, improving the UI program will require the state to pursue several approaches at the same time and carefully assess progress. In the end, though, undertaking this work would put the UI program in a better position to support workers and the economy during the next economic downturn.”KCRA 3 reached out to EDD for a response to the LAO’s report. The agency responded in a statement saying it has already incorporated many of the recommendations. It also said an additional $136 million from the new state budget will go toward improving call centers, simplifying forms and other upgrades.EDD’s full response is below:EDD appreciates and will carefully review the LAO’s ideas for further simplifying processes and speeding up the delivery of services to Californians. Many of these ideas, such as limiting improper claim denials and minimizing delays, have been incorporated into EDD actions over the past year.California has the nation’s largest public benefit system, with over 21 million people filing 63 million claims over the past decade. During the pandemic, EDD has paid over $180 billion to Californians in need. The pandemic tested every benefit system in the country, exposing the need to deliver better systems and modernize operations. As part of California’s commitment to improving EDD’s customer service, the recently-enacted state budget includes $136 million for EDDnext, a major effort to modernize EDD and further improve the customer experience. Funding will be used for efforts related to EDD’s benefit systems—improving call centers, simplifying forms and notices, including user testing and engagement, developing data analysis tools to continue curbing fraudulent benefit claims, and upgrading department training and tools to increase the pace of application processing. We agree with the LAO that “EDD must balance the need to prevent fraud … with the priority to deliver payments in a timely and easy manner.” Furthermore, through EDD’s partnership with the Legislature, and by implementing reforms recommended by the Strike Team and State Auditor, the department has been aggressively investing in improving customer service:• Continually improving the mobile phone-ready version of the website so claimants can file claims and easily access information on their mobile devices including smartphones.• Deploying the ability to upload documents, including a mobile-friendly version.• Calling customers directly from the remote virtual call center to seek clarifying information and resolve claims.• Launching a new feature that allows a caller to hold their place “in line” when contacting the call center, eliminating the need to wait on hold until the Department calls the claimant back.• Continuing to monitor and respond to customer areas of confusion and trending issues and addressing them with improved public information.• Posting information through the customer service portal UI Online to let claimants know they could be eligible for a tax credit to lower health insurance costs and housing assistance for renters and landlords.• Launching a new tool on the Unemployment Insurance Online application to help claimants get more information about the status of their claims.• Implementation of Strike Team recommendations to evaluate California Unemployment Insurance Appeals Board decisions to inform EDD practices. EDD also continued its work to reach diverse communities across California, with materials being translated into eight different languages and expanding translation services with a multilingual access portal. The department also recently launched a special Language Access Office tasked with developing and collaboratively implementing strategies to increase access to EDD benefits, services, programs, and information.