Gavin Newsom is shutting down California again, which means even more Californians in the clutches of his Orwellian unemployment office: the EDD.

What’s transpired at that agency is the worst bureaucratic failure in our history. Many of the 1 in 4 Californians who’ve filed claims are waiting over 120 days for benefits. Many have received nothing.

Even when the economy was re-opening, California had the highest unemployment in the country combined with nearly the slowest delivery of benefits.

Many are wondering: what good is an unemployment office if it can’t help you when you lose your job – especially when you’ve lost it on the government’s orders?

I’m joining Jim Patterson to seek an audit and investigation of the EDD:

Our proposal demands answers on what’s gone so terribly wrong, so Californians in need are never let down like this again.

But we already know the basic story: longstanding performance failures of state government were amplified as Gov. Newsom turned the agency over to special interest groups pushing a political agenda, with dire consequences for Californians struggling to survive.

Here is a brief summary of some of those consequences.

Incompetent Service

My office hears from dozens of constituents each day with EDD horror stories: calling hundreds of times with no answer; receiving notices with someone else’s social security number, employer, or earnings; fraudulent activity on issued debit cards.

This experience is bipartisan: San Francisco Assemblyman David Chiu has started a #EDDFailoftheDay hashtag. State Senator Scott Weiner said, “After four months of this, at some point the agency has to get it right.”

Data from Deloitte showed that 10 percent of calls result in speaking to a live person. Those who do get through are often abruptly hung up on. Other issues include:

• After claiming to be open from 8 AM to 8 PM, EDD only only answers specific questions until noon.

• EDD claims wait times are 7 minutes, but people can wait hours after calling dozens or hundreds of times.

• The callback option fails, with people requesting a callback and not getting one.

• No reason is given for denials, and when one is given it often doesn’t make sense. One person had an electronic application denied as “illegible.”

In one stunning episode, people waited weeks for their Bank of America debit cards, only to find out EDD had neglected to submit their names to the bank.

Politicization of the EDD

With so many claims and so many problems, you’d think EDD’s sole focus would be getting Californians the benefits they’re entitled to.

But instead, the agency is devoting personnel and resources to harassing small businesses with burdensome audits:

I wrote a letter to Gov. Newsom and the EDD Director asking them to cut it out. Their answer: No.

They said “the identification of misclassified workers” must continue. This means bringing down the hammer of AB 5, which bans most independent contracting, to generate fines and penalties.

Gov. Newsom even dedicated $21 million in scarce budget dollars for these enforcement actions – one of the most outrageous decisions I’ve encountered in politics. On the Assembly Floor, I spoke about a cancer survivor named Monica who lost her whole livelihood to the law that this $21 million will enforce:

One small business owner told me: “Between COVID-19 and the possibility of EDD fines related to AB 5, this could be the end of my business. I have 7 employees and we’d all be looking for work.”

In a particular irony, documents recently received by my office show that EDD may be attempting to hire independent contractors in violation of this very same law.

Federal Benefits

As part of this same political agenda, Californians had to wait for their federal benefits as Gov. Newsom and the EDD played games to help out special interest allies.

After Congress delivered benefits for independent contractors, EDD held up the money. Contractors were implored to file as “misclassified” employees and “name names” of their business partners who could be audited and sued. Even Adam Schiff admonished the agency to stop holding back these benefits.

Then, EDD said “tough luck” to people with mixed W-2/1099 income who are ineligible for benefits due to an oversight in the CARES Act. But other ineligible groups, such as undocumented immigrants, were given a $75 million fund.

I asked Gov. Newsom to fix this inequity, and he refused.

Archaic Technology

For years, the nonpartisan Legislative Analyst’s Office reported on EDD’s “aging and inflexible” IT system. A stone’s throw from Silicon Valley, our government can’t muster the basic technology to serve Californians.

EDD says we are in the middle of an 11-year “modernization” of its software. This $30 million project, launched 4 years ago, is still in the “planning” stages. Other states took less than 11 days by partnering with the private sector on cloud-based solutions.

The result has been system crashes, delays, and innumerable glitches in what the LA Times called “a perfect storm of failures for a state government with a long history of technology problems.”

Penalty Weeks

EDD made thousands of people who had made a mistake on their application serve “penalty weeks,” a kind of government-imposed timeout with no benefits.

People were denied benefits and left without income even after paying their fines and rejoining the workforce. This punitive treatment (with hardly any due process) made no sense when government was telling people they can’t work.

Fortunately, EDD did agree to my request that they stop this (albeit in a roundabout way) after a bipartisan group of legislators signed my letter to the Director.

Accountability

I’ve asked EDD and Gov. Newsom again and again to stop the political games. There’s no time for it, as people are in desperate need.

When it comes to accountability, the audit is just a start. Because EDD clearly doesn’t get it. Consider this oddly triumphant press release from just two days ago:

That’s cold comfort to all of the Californians still waiting on their benefits, wondering how they’ll provide for their family during a shutdown with no end in sight.

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