California EDD Works to Extend Benefits While Blocking Fraud

With the passage of the American Rescue Plan, the state’s labor department is working to extend unemployment benefits to those who are eligible while verifying documents to prevent further fraud.

(TNS) — Congress cut it close with unemployment benefits when it passed the American Rescue Plan, which extended the benefits just days before their March 14 expiration date. President Biden signed the $1.9 trillion stimulus package Thursday, ensuring that the benefits, which now include a $300-a-week supplement, will be extended until Labor Day.

Some jobless Californians who depend on that money can breathe a sigh of relief.

Although the state Employment Development Department had to revamp its systems with all the intricacies of the new regulations, it said Friday that people who have received benefits for less than a year should automatically get the extension.

But at the same time, EDD has two other big projects to tackle. It must handle the huge number of people who now have been unemployed for 12 months, which requires filing a new claim. It also must collect and verify documents from self-employed people receiving Pandemic Unemployment Assistance (PUA) under new federal rules to stamp out fraud. That could create a bottleneck at the state agency, which has struggled all year with the surge of pandemic unemployment claims.

Many people are nearing the 12-month mark, as the gargantuan demand for unemployment benefits started a year ago this week and continued to hit all-time highs in April and May. After they reapply, EDD must assess their situation and eligibility status to decide whether they should be covered by regular state unemployment or new federal benefits.

EDD initially gave an ambiguous answer about how it will handle the situation before later saying that it could add on American Rescue Plan benefits for many claimants.

"We always have to program new changes on federal benefits into our system including initiation and sunset dates," EDD spokesperson Loree Levy said in an email Thursday. "So now that we are getting a sense of what is being approved at the federal level, we can look for the U.S. Department of Labor guidance and make some assessments as to what will be needed to implement the new provisions."

Lawmakers frustrated with the agency's slow pace gave more straightforward assessments.

"Given how rocky the implementation of the previous extension was in December, I'm worried," said Assembly Member David Chiu, D- San Francisco, whose office is besieged with constituents needing help with their benefits. "It's my sincere hope that EDD has learned from past experience and has a real plan to get folks benefits they're owed without delay or hassle."

To say the least, EDD does not have a good track record of quickly implementing new features or handling massive increases in demand.

Late last year when benefits expired for just one day before being reinstated by the federal government on Dec. 27, EDD said a programming issue prevented it from reinstating them for people whose benefits had run out before Dec. 26. It needed until March 7 before the affected people, who numbered about 185,000, could start certifying for extended benefits, leaving them without payments for close to three months.

As executive director of the Center for Workers' Rights in Sacramento, Daniela Urban helps claimants struggling to get paid. "I am hopeful that EDD anticipated this extension and has a plan in place on how to implement it with minimal disruptions or gaps," she said in an email.

Still, the fact that millions of people are hitting their one-year anniversary of unemployment is troublesome. "The backlog of claims is likely to grow, especially for those claimants who may have difficulty completing ID.me," she said, referring to the outside vendor that handles identity verification.

Andrew Stettner, a senior fellow at the Century Foundation who studies unemployment, said he worries there could be a logjam in California and other states.

"I've been humbled by how challenging these changeovers are," he said. "The load on these systems is high and they need to be careful in making changes."

Some blame the federal government.

"Congress didn't give the state agencies enough time," Stettner said. "They're very proud of themselves that the president signed the bill two days before the benefits expired. That's not much time."

Meanwhile, people already buffeted by the vagaries of getting benefits are anxious about what the latest changes could mean.

San Franciscan Matt Ruffin, 40, already was struggling to make ends meet with three jobs — as an assistant house manager at the Orpheum Theatre, floor host at Equinox Sports Club and front desk person at Sharon Art Studio. When the pandemic started, he was laid off from all three.

He was able to get unemployment benefits until mid-December when they abruptly ceased. He could have been among the 1.4 million accounts EDD froze for suspected fraud, or among the 185,000 that could not recertify until March.

"There was no explanation from EDD as to why I was not paid," he said. "If they messed up or had a glitch, they haven't told me."

He spent hours calling EDD and was told several times that everything looked fine, but still didn't get paid. State lawmakers have also tried to help, which got him one week of benefits paid but the rest languishes.

In the meantime he's juggling bills and borrowing money from friends and family. His $1,400 stimulus check will go to pay rent, "but at least I won't have to borrow money this month," he said.

"With the stimulus package, I am worried that this could cause EDD problems, especially for people like my roommates or my brother or former coworkers who had avoided the first batch of issues," Ruffin said. "I'm hopeful that getting it signed before it lapses saves this from being the outcome, but I've lost all trust in EDD."

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