EDD furloughs likely delayed thousands of unemployment claims

Laveta Brigham

As desperate Californians sought help with unemployment insurance claims over the summer, hundreds of employees who could fix their problems were missing work under a state-imposed leave program, according to payroll data. Gov. Gavin Newsom and the Legislature instituted a furlough-like leave program for all state civil service employees in […]

As desperate Californians sought help with unemployment insurance claims over the summer, hundreds of employees who could fix their problems were missing work under a state-imposed leave program, according to payroll data.

Gov. Gavin Newsom and the Legislature instituted a furlough-like leave program for all state civil service employees in July to help address a projected $54 billion deficit caused by the coronavirus outbreak. The leave program generally reduces workers’ pay in exchange for two days off per month.

The furloughs hit the Employment Development Department as its workforce, facing a historic number of unemployment claims, was already hobbled by inadequate technology and staffing missteps. The department during the pandemic accumulated a backlog of more than 1.6 million unemployment claims this year that it does not expect to work through until January.

In July, 684 employees who solve complex claims problems — the kind that created the backlog — took a combined 1,078 unpaid days off under the program, according to data provided by the State Controller’s Office. In August, 860 employees used 1,538 leave days, according to the data.

Meanwhile, the department has been shelling out millions of dollars every month in overtime. In July and August, the department paid employment programs representatives $7.9 million for 204,000 hours of overtime, the equivalent of about 25,500 days, according to Controller’s Office data.

Had they not taken days off through the leave program, workers could have processed up to about 62,000 more claims over those two months, according to an analysis by The Sacramento Bee based on a strike team finding that experienced employees can process 24 claims per day.

The figure represents an upper-end scenario, since not all employees are experienced. September’s numbers aren’t yet available.

The number of potentially affected claims, while relatively small compared to the department’s backlog, spotlights a question about Newsom’s approach to furloughs: Why apply them uniformly across the state’s 230,000 workers, rather than selectively?

The Governor’s Office didn’t respond to that question from The Bee. Employment Development Department spokeswoman Loree Levy said the leave program “has not had a negative impact on EDD front line staff’s productivity. Many of the (unemployment insurance) program team have worked overtime to help address the historic claim load and implement program enhancements.”

Ten years ago, Republican Gov. Arnold Schwarzenegger exempted the Employment Development Department from his furloughs in a similar crisis as the department racked up overtime during the Great Recession.

The department has had to process far more claims this time around, yet its employees face many of the same hurdles, including furloughs.

“As the state looks at its staffing, it wants to make sure that it prioritizes the Californians who are most vulnerable in all this,” said Mike Shires, an associate professor of public policy at the Pepperdine School of Public Policy. “And certainly that unemployed population is one we should be paying a lot of attention to.”

Record-high unemployment

The Employment Development Department processed about seven times as many unemployment insurance claims in the first two months of the pandemic, when unemployment reached a record high 15.5%, than it did during two months at the height of the Great Recession, according to May news releases.

By July 4, the department had processed about 7.4 million claims, including Pandemic Unemployment Assistance claims from people who are self-employed or independent contractors.

The department’s outdated technology systems can process about 60 percent of claims automatically, but the rest require attention from employees who must fix problems with missing or wrong information, including discrepancies that could indicate fraud, according to the strike team’s report.

From July 4 to Sept. 5, with the furlough program in effect, it processed another 4.3 million of the same types of claims, according to department data. Roughly 1.7 million of those would have required attention from employees based on the figures in the report.

The department has been rapidly hiring new employees to try to manage the load.

The employees who process complex claims are called employment programs representatives. In early 2018, the department employed about 1,800 of them. By the end of August this year, it employed twice that number.

The strike team didn’t specify whether other classifications of workers also process claims, and the department didn’t respond to a question from The Bee about whether other workers help process claims.

Based on the strike team’s report, the department paused new claims two weeks ago to work down the backlog. The department was scheduled to resume new claim processing Monday with a new software program called ID.me. Officials expect the program to increase automatic claims processing to 91% from the current 60%. If it works, it will reduce the burden on employees to manually process claims.

Great Recession exemptions

When Schwarzenegger first imposed furloughs in February 2009, he exempted only California Highway Patrol officers. He soon added Cal Fire, whose employees work unusual schedules and a lot of overtime.

He vetoed a proposal from Democrats in the Legislature to exempt departments that get at least 95 percent of their revenue from sources other than the general fund. During the recession, the state borrowed from those funds.

But in July 2010, he issued a furlough order exempting the EDD along with the State Compensation Insurance Fund, the California Housing Finance Authority and the California Earthquake Authority.

Newsom announced the personal leave program in May, saying no one would be exempt, himself and his staff included. The program is projected to save about $2.4 billion per year for two years, according to the Legislative Analyst’s Office.

Unlike under Schwarzenegger’s “furlough Fridays,” current state workers may bank their leave days for the future under various terms.

Agreements with the state scientists and engineers, for example, temporarily expand leave banks to let workers hang on to personal leave days longer than state rules normally allow.

The state’s agreement with SEIU Local 1000, the union representing Employment Development Department workers, doesn’t offer expanded leave banks. It says the following:

“Employees will be given maximum discretion to use (personal leave program) 2020 subject to severe operational considerations. However, whenever feasible, PLP 2020 should be used in the pay period it was earned,” the union’s agreement says.

Local 1000 spokesman Brian Nash declined comment.

If Newsom were to exempt EDD today, other groups would surely line up for exemptions of their own.

After he announced plans to cut state pay in May, the firefighters’ union argued its members should once again be exempt. State firefighters are working weeks on end, sleeping on the ground between shifts battling deadly wildfires at reduced pay.

Thousands of prison workers have contracted coronavirus at work while subject to pay reductions. Department of Motor Vehicles employees work in offices that serve steady streams of customers as the virus continues to spread. Many departments bring in revenue for the state.

“I think you have to look at where you need resources and make sure you have the resources there,” Shires said. “And those unemployment benefits are the difference between people paying their rent and eating, and not. I would think that would be a high-priority area, up there with health care and public safety.”

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Wes Venteicher anchors The Bee’s popular State Worker coverage in the newspaper’s Capitol Bureau. He covers taxes, pensions, unions, state spending and California government. A Montana native, he reported on health care and politics in Chicago and Pittsburgh before joining The Bee in 2018.

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