California halting new unemployment claims for 2 weeks during ‘reset’ with staff, technology

California will not accept new unemployment claims over the next two weeks while the state’s Employment Development Department adopts new fraud prevention technology and works to clear out a backlog, Gov. Gavin Newsom’s administration announced late Saturday.

Employment Development Department Director Sharon Hilliard announced the pause on new claims in response to recommendations from the unemployment “strike team” Newsom appointed in July.

During the two-week pause, people filing new claims until Oct. 5 will be asked to provide contact information to the state. Hilliard wrote that they will be contacted to file claims when processing resumes.

“New claimants should not see a delay in benefit payments, and in fact many of them will actually get their payments faster as they avoid the older time intensive ID Verification process,” EDD Director Hilliard wrote.

The pause on new claims is not expected to interrupt payments for people already in the system. Last month, California’s unemployment rate fell to 11.4%, down from 13.5% in July. About 2.1 million Californians were out of work last month, according to the department.

Burdened by outdated technology and overwhelmed by a historic wave in unemployment claims, Hilliard’s department has struggled through the coronavirus outbreak.

It has 1.6 million pending claims that require eligibility verification, and it does not expect to work through them until late January. It’s also confronting a recent surge in suspicious claims that the department is investigating as suspected fraud. About 40% of new claims are being routed to manual processing because they require verification, slowing down payments.

Newsom charged the strike team with making recommendations to address the immediate crisis and to look for some long-term solutions to prepare the department for future recessions.

Its recommendations are to:

Quickly adopt an identity verification tool that would reduce the number of claims that require manual processing from a state employee. The department is contracting with the firm ID.ME to carry out the recommendation.

Free up more experienced employees to work on complicated claims. The Employment Development Department hired thousands of temporary workers this year to get a handle on the millions of claims filed since the coronavirus outbreak stalled the state’s economy. In some cases, the strike team found, senior employees are spending their time training new workers. “New employees are taking up almost all the bandwidth of the experienced employees,” the strike team wrote.

Reconfigure call centers. Last month, Hilliard told lawmakers that people contacting the department to ask about claims were waiting four to six weeks to have their calls returned. The task force recommends the department update its call center messages to better direct callers, assign senior employees to complicated cases and stop hiring new workers. “It is critical to keep experienced claims processors focused on the tasks only they can perform,” the task force wrote.

Halt a technology modernization project. For three years California has been developing an unemployment system modernization intended to improve customer experiences the department’s outdated technology. It has not delivered, the task force wrote. It recommends the state “pause” the system modernization and begin a new effort after it resolves its unemployment claims backlog. “EDD must begin the process of truly transforming claimants’ experiences,” the task force wrote.

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