Nonstop calls and no answers: Why California wasn’t prepared for surge in unemployment

Tribune Content Agency

SACRAMENTO, Calif. — The coronavirus pandemic arrived with little warning in California, but the state department that handles unemployment claims has known for years it was unprepared for widespread job losses.

The losses have arrived, with 3.2 million people filing unemployment claims in the state in the last six weeks. Many said they have struggled with a clunky online system and maddening delays when they call — often hundreds of times — to try to reach a human at the Employment Development Department.

The department’s leaders have faced criticism over its outdated computer systems since before the Great Recession. Yet a $30 million modernization project launched four years ago remains in the planning stages, even as a new recession seems to be arriving.

Had the department started the overhaul sooner or worked more quickly, Tim Irish, 62, of San Rafael, might have been able to resolve problems with his claim online.

After he was laid off from a design firm three weeks ago, he immediately filed a claim, only to receive a notice of unemployment insurance award two weeks later that contained a mistake related to his wages, Irish said.

When he tried to contact EDD online, he encountered “a nightmare of dead ends, circular links and confusing jargon,” he said. He had no better luck trying to call.

A better digital process might have spared Christopher Thompson, 30, of Fresno, the 500 calls he said he has placed trying to fix an issue with his online claim.

Thompson was laid off from recreational store HobbyTown five weeks ago. After he filed, he said his claim showed he had earned $0, a mistake he hasn’t been able to fix. He’s paid rent and bought food with his federal stimulus check, but that money is running out.

“I’m essentially up against the wall at this point,” he said. “I have no other solutions than to try to call them repeatedly each day.”

California Labor Secretary Julie Su on Friday acknowledged concerns like theirs and blamed the outdated system for confusion when she spoke on a public Facebook video.

“I know this sounds crazy since we’re California, we’re the tech capital of the world,” Su said. “But our system is … inflexible, it’s very hard to change.”

With a more modern system, applicants might be able to do things like withdraw an application and resubmit, but the outdated systems prevent it, Su said.

Retraining state workers

The department has taken some steps to improve the process since the last recession, spokeswoman Loree Levy said in an email.

Upgrades have allowed it to make eligibility adjustments and process large numbers of claims automatically, Levy said.

The department is training 1,340 state workers from other divisions and departments to help with claims and has opened a new phone line from 8 a.m. to 8 p.m., Levy said.

The people who answer those calls don’t work directly on unemployment claims, but Levy said they can “help open up access on the clogged lines.”

Many filers are new to the process, Levy said. She said many people who call probably “have not taken full advantage of all of the self-serve tools we have available,” like video tutorials, a checklist to help people prepare to file, and a step-by-step chart describing what to expect.

The department has also set up a frequently asked questions page to address common questions, such as what it means when there’s a $0 award.

Filing a claim

The department’s old systems require workers to manually enter commands in green text on black screens to process claims using systems such as COBOL.

A more modern system would use more automation, according to budget documents the department filed with the Governor’s Office in January. And it would expand online access to claims for people like Irish and Thompson, according to the documents.

Those changes would have been the “only way” to meet the “increased demand for services” of a recession, department officials said in the budget request.

Nonetheless, the department paid out more than $2 billion in unemployment benefits last week and nearly $4 billion since mid-March, Labor Secretary Su said in a Thursday letter to EDD Director Sharon Hilliard.

Su on Thursday suspended a requirement for unemployed workers to update their job status every two weeks to reduce staffers’ workload.

The department aims to process claims within 21 days.

“For most people, because of all of the unique measures we’ve taken, it continues to be that they should be able to get their first payment within about three weeks from applying,” Levee said.

But many filers still haven’t received payments after 21 days, they said in calls and emails to The Sacramento Bee.

Jeremy Lanni, 40, a Sacramento restaurant manager from South Natomas, said he finally got his application approved 24 days after submitting it, but the department left his apartment number off his address, so he never received mailed notices.

The department’s aging systems could make it especially difficult to get federal unemployment money to Californians, according to the Legislative Analyst’s Office.

California’s maximum state benefit is $450 a week. Another $600 a week in federal money is available through July. California was among the first states to start paying the $600 despite its technology challenges.

The department will face a new test Tuesday, when it starts accepting online applications from people who are self-employed, own businesses, work as independent contractors or who have short work histories that exclude them from normal benefits.

The Great Recession

The department has been through all this before.

A decade ago, the Assembly Insurance Committee hauled the department’s leaders into a hearing and chastised them over IT problems and delayed claims amid the Great Recession.

“I’m shocked at how bad this situation has become,” Charles Calderon, a former Democratic assemblyman from Whittier, said at a 2010 hearing. “If there’s anything that government should be doing in these economic times, it’s to be getting unemployment money to families that need it. If we can’t do that, what else are we going to do? We can’t govern.”

The department upgraded its systems for unemployment insurance in 2013, but the update caused problems that resulted in a backlog of claims.

Former Gov. Jerry Brown ultimately ordered the department to pay claims upfront and determine whether people were eligible later.

Lawmakers blasted the department’s leaders again and ordered changes: the department needed to improve call center access, put more information on its self-service website and provide better written explanations for claims problems, rather than simply telling people to call EDD.

The department completed another “partial modernization” in 2015, but the partial fixes contributed to the department’s patchwork of “overly complex and fiscally unsustainable” systems, according to a bid document posted by the department.

Planning started in 2016 on a major technological overhaul that required hiring staff and contractors.

The department’s outdated systems contain 11 billion rows of data, including sensitive information such as Social Security numbers, Department of Motor Vehicles records and tax information, according to budget documents.

The department’s tax branch is the second-largest tax collection agency in the U.S., collecting $81.5 billion in payroll taxes in the 2018-2019 fiscal year, according to the documents.

The project has been progressing through the state’s involved planning and procurement process. It’s scheduled to start this year and take four years.

The project’s speed is typical of large-scale California IT efforts. A major effort to overhaul the state’s decades-old payroll system came crashing down in 2013, and another attempt will take at least four more years. A major accounting program known as Fi$Cal still is not fully functional 15 years after its launch.


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