EL SEGUNDO, Calif. — As of August 6, the California Employment Development Department (EDD) has provided nearly $60 billion in unemployment benefits to out-of-work Californians. It has processed 9.7 million claims for Unemployment Insurance (UI), extensions, and Pandemic Unemployment Assistance (PUA).
Last week, nearly 400,000 Californians submitted UI applications.
Michael S. Bernick was the director of the EDD from 1999 to 2004. Today he’s an employment attorney with Duane Morris LLP. Bernick provided perspective on how many applications the EDD received at the height of the pandemic as compared to early 2020.
“In the weeks prior to the pandemic in February and early March, the state was receiving about 42,000 claims per week,” he said. “And during the height of the layoffs — the pandemic layoffs in late March and April and early May — the state at some points was receiving over 600,000, 700,000, so the volume has been way, way beyond anything we’ve seen really in the post-World War II period here in California.”
To help with the influx of applications, Bernick said the EDD has added 5,000 staff members to the UI division.
“It moved existing EDD staff from other divisions within EDD, such as the tax division and jobs service, over to the UI. It’s done a lot in terms of moving individuals, and it’s also spoken with tens of tech companies, so it hasn’t ignored the tech side, to try to improve,” he said.
The EDD uses technology that was first designed in 1959.
“The problem is that we’re dealing with a computer system that actually still is based in — if you can believe it — COBOL. In 2003, nearly 20 years ago, Governor Davis approved what was known then as a UI Modernization Project to improve the computers at EDD, and some of that was done over the past 17 years. Most of all the implementation of unemployment insurance online, which we have today, but a lot of it wasn’t done and it’s — I’m not here to just defend the department — but a lot of it has to do with the difficulty the state has had continually over the past 20 years to do any major technology projects.”
COBOL is a difficult system to grasp, especially for new employees.
“I’ve been with the UI system in California, involved with it now for 40 years, more than 40 years. I got my start in the job training field, running the job training group, back in 1979. So I’ve participated. It is a very complicated system. I don’t know if even after 40 years I fully understand it, and it’s got a lot of moving parts,” he said. “So it’s not a simple system. It’s actually much more complex than our other state benefit systems such as welfare, such as CalFresh, such as some of the other major state benefit systems.”
The UI division is different from other state departments because each case is specific to the individual, and an applicant's claim can change frequently depending on his or her employment status. For example, during the pandemic, someone could have been employed in the beginning, then unemployed in April and May, and now works part-time. If that's the case, the individual’s unemployment claim would have been adjusted between his or her out-of-work period and now, when he or she is working part-time.
“If you work part time, you need to report some of your earnings. It’s a complex system, and it’s one that is individually adjudicated to prevent fraud. So I mean all of us say — anytime you’re in Sacramento — people say, ‘Well, we’ve got to do everything we can to eliminate fraud and waste,’ and that’s true, but that’s the trade-off,” Bernick said. “You could imagine a system in which anyone applied and you just threw out the benefits. That’s not the system we have, and because it’s not the system we have, we do have this individual adjudication, and that takes time.”
People have always filed fraudulent unemployment claims, Bernick said, but it's happening more frequently during the pandemic.
“It’s particularly an issue now because you have the additional, until recently, you had the additional $600 per week benefit that made it much more attractive. Generally, unemployment insurance in the state is between $45 and $450 per week,” Bernick said.
Hiring more employees and upgrading the technology system can only do so much to improve the EDD in Bernick’s mind. He said the real solution to fixing California’s unemployment problem is to reopen the economy.
“Unless we’re willing to do that more aggressively, more confidently... relying on what would become an Unemployment Insurance economy, we’re going to continue to have these same delays,” Bernick said. “So yes, there is a solution, but that solution lies outside of the administration of the UI system itself. It lies in the bigger reopening of our economy.”
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