Newsom: CA To Stop Accepting New Unemployment Claims For 2 Weeks

By Eli Walsh, Bay City News Foundation

CALIFORNIA — Gov. Gavin Newsom said Monday that the state Economic Development Department will stop accepting new unemployment insurance applications for two weeks to determine how to reduce the state's vast backlog of claims.

The EDD temporarily halted accepting new claims on Saturday following the release of a report detailing why the agency has not been able to handle the influx of unemployment insurance applications since the novel coronavirus pandemic began.

The report from the EDD Strike Team found a backlog of some 600,000 unfulfilled unemployment claims due in part to claims being flagged for manual procession rather than being processed through the state's automated identification system.

In addition, that backlog was growing by some 10,000 claims per day before the agency halted new applications. Newsom argued the claim processing issue is a result of the state's aging technological systems, which he said his administration inherited and has been "trying to patch it together."

"This system is a 30-plus-year-old technological system," Newsom said, adding that it needs to be upgraded or "frankly ... strewn to the wastebin of history."

The two-week pause in accepting new claims will allow the state to install a new identification system from the identity verification company ID.me, which is already used by the California Department of Motor Vehicles to confirm identities.

Before the two-week pause began on Saturday, some 40 percent of unemployment claims were being sent to manual processing, which can take weeks or months to complete, according to the report.

Newsom and state Government Operations Secretary Yolanda Richardson, who co-chaired the strike team, said the new automated ID system would allow EDD to process around 90 percent of those stagnant claims in a matter of weeks.

"This is about getting a check in their hand much faster," Richardson said.

The report was initially supposed to be released one week ago, but Newsom said the two-week pause went into effect Saturday because "I didn't want to wait another day to start this reset period to get this system back on its feet."

The ID.me system is expected to go live and begin processing claims Oct. 5, according to state officials. Once that happens, EDD Director Sharon Hilliard said the backlog is expected to be cleared by January.

"But we're making huge progress each and every day," she said, adding that many backlogged claims are likely to be processed before then. Newsom said the two-week pause is not a silver bullet to fix years of technological issues and months of delayed claims, but is part of the state's short- and long-term strategy to more efficiently help Californians.

Part of that long-term strategy, he said, also centered on procuring more information technology experts to "bring modern and innovative thinking into our processes."

"We recognize the magnitude of the responsibility and the extraordinary challenge that we have in front of us," Newsom said. "So we'll be more transparent ... in real time over the course of weeks, not waiting months for the results of these efforts."

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