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By ADAM BEAM, Associated Press
SACRAMENTO, Calif. (AP) – California Governor Gavin Newsom on Tuesday signed new laws to strengthen the security of the state’s unemployment system after his administration accepted billions of dollars in fraudulent payments during the pandemic while workers Legitimate applicants languished in a backlog awaiting approval.
In its rush to approve unemployment benefits amid a pandemic shutdown that has put millions of people out of work, state officials have approved billions of dollars on behalf of those in jail – some in the corridor of the death – who were not eligible to receive them.
Meanwhile, thousands of legitimate claimants waited months for benefits to be approved, often frustrated at not being able to reach someone in the overwhelmed call centers of the Department of Employment Development.
An audit earlier this year blamed the Employment Development Department for “major missteps and inaction” that have cost taxpayers billions of dollars. Newsom blamed the federal government for drastically increasing unemployment benefits in a way that put them at significant risk of fraud.
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Prisoners are not entitled to unemployment benefits. But the Employment Development Department did not know who was in jail. At least 35 other states have implemented a system of matching unemployment claims with a list of detainees. But California was not one of them.
Newsom signed a law on Tuesday to address this issue, requiring the California prison system to share the names and Social Security numbers of inmates with EDD.
“The government needs to do a better job as the custodian of hard-earned taxpayers’ money,” Democrat and bill mover MP Cottie Petrie-Norris said last month when the bill was passed. by the State Senate. “Due to a flaw in the current system, hundreds of millions of dollars have been lost.”
Newsom issued the first statewide stay-at-home order in March 2020 due to the coronavirus pandemic. Although the ordinance helped California avoid an early wave of cases, it has put millions of people out of work.
As of March 2020, California has received 25.2 million jobless claims and paid more than $ 176 billion in benefits. But the agency admitted that at least $ 11 billion of those payments were fraudulent, with an additional $ 19 billion suspected of fraud.
Many states have faced unemployment fraud during the pandemic.
In neighboring Arizona, state officials said last week that scammers pocketed nearly 30% of the $ 16 billion in unemployment insurance payments sent since the start of the pandemic.
The Office of the Inspector General of the United States Department of Labor estimated in June that states had unduly paid more than $ 87 billion of the $ 873 billion in special COVID-19 unemployment benefits when they ended. September 6.
This is not the first time in recent years that the California employment agency has been overwhelmed by an increase in applications. The agency was overwhelmed during the Great Recession ten years ago. caused by the collapse of the real estate market.
But a state audit earlier this year found the agency still had no plan for another economic downturn that would put millions out of work. The new law signed by Newsom requires ESD to develop and implement a plan for future recessions.
“The inability of the EDD to respond quickly and effectively to the increase in the number of applicants is an issue that concerns the administration of three governors from both parties,” said Senator John Laird, Democrat and author last month. of the law. past the Assembly. “But it’s up to us now to make sure these issues are corrected.”
Newsom also signed a law from Freelance MP Chad Mayes that requires the agency to provide additional notification to people before disqualifying them from benefits.
Earlier this year, state lawmakers agreed to give the Department of Employment Development hundreds of millions of dollars to deal with its backlog of claims. Lawmakers also ordered the department to start offering applicants a direct deposit option, which would prevent criminals from stealing benefit checks from mailboxes.
Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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