California’s unemployment agency still under scrutiny as fraud payouts rise to $20B


SACRAMENTO, Calif. (KTXL) — State lawmakers on Monday grilled leaders of California’s Employment Development Department. 

The state agency responsible for unemployment claims is trying to improve its systems after it paid out billions in fraudulent claims. It also continues to chip away at a backlog of people waiting on benefits. 

“When an agency fails this badly, it really erodes people’s faith in government,” said Assemblywoman Cottie Petrie-Norris, D-Laguna Beach. 

EDD leaders told lawmakers they were working to regain the trust of Californians. In an oversight hearing Monday, the EDD’s director said the agency is adding staffing, automating some processes, having less call traffic and creating a new fraud unit, which should be fully staffed by end of November. 

“Are we satisfied? No, we are not. We will continue to make changes until things are complete,” said Director Rita Saenz. 

Lawmakers noted there is now a spike in unemployment claims, with 80,000 filed the week ending on Oct. 16. It’s the highest total the state has seen in the last six months. 

The agency’s current backlog sits at 119,000 claims. 

“New reporting last week showed that some claimants have been waiting up to 26 weeks for an initial eligibility interview. This is is simply unacceptable,” said Assemblywoman Wendy Carillo, D-Los Angeles. 

In an update on fraud, EDD leaders said they now estimate $20 billion of the $177 billion paid out during the pandemic went to fraudulent claims. 

“If we don’t address it in a more serious way, it’s going to continue to be a big big problem. The amount of money we’re losing is enormous and inexcusable,” said Assemblyman Tom Lackey, R-Palmdale. 

The state auditor told lawmakers she sees notable improvements from the EDD, but she said the department needs to follow through with planning and legislative oversight needs to continue. Lawmakers said they’re committed to doing so. 

“And that we ensure that we’re not sitting here in 2032 rehashing these same issues and conversations,” Petrie-Norris said. 

This was the EDD’s fifth hearing with state lawmakers over the last year and a half, with likely more on the way. 

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Most Popular Stories

Latest News

More News