(CALMATTERS) – Desperate times call for desperate measures.
With hundreds of thousands of jobless Californians waiting more than three weeks for the state Employment Development Department to process their claims, the agency announced Thursday that it will start automatically paying benefits to claimants who have already cleared fraud filters and verified their identity and who continue to certify their eligibility.
However, EDD acknowledged it may end up sending unemployment benefits to people later determined to be ineligible. The department also noted it may end up overpaying certain claimants, in which case it could be difficult to get the money back: Overpayments can be waived as a result of fraud, if the jobless person demonstrates a financial hardship, or if the extra payment wasn’t the claimant’s fault.
The move is reminiscent of one EDD made early in the pandemic, when it paid claimants before verifying their eligibility in an attempt to speed up processing times. A scathing state audit found the decision not only significantly increased the possibility of fraud, but also could have resulted in EDD paying $5.5 billion to 1.7 million ineligible claimants.
“This is a monumental change by EDD that will allow more claimants to be paid on time.”Daniela Urban, executive director of the Center for Workers’ Rights
“This is a stunning admission that (EDD) can’t do their fundamental task. Now to clear their giant backlog, they’re going to take the dangerous risk of paying fraudsters, too.”Assemblymember Jim Patterson, a Fresno Republican
The announcement comes just days after EDD hired a former federal prosecutor to help crack down on unemployment fraud. Bank of America, which delivers California’s unemployment benefits via prepaid debit cards, said Thursday it will start sending out chip-enabled cards on Sunday to reduce fraud.
It also comes amid an avalanche of claims. More than 58,000 Californians filed new jobless claims for the week ending July 17, an increase of more than 1,300 from the week before, according to federal data released Thursday.
Yet thousands of open positions are going unfilled, keeping the Golden State’s unemployment rate at a static 7.7%. A United Ways of California study offers one reason why residents may not be clamoring to return to service jobs: The rising costs of housing and child care have outstripped wage growth so much that 3.5 million working households don’t make enough for the most basic necessities, CalMatters’ Erika Paz reports.