Written by Bobbie Wylie
Fraudulent claims to California’s unemployment department increased exponentially at the beginning of the COVID-19 pandemic. Now, the Employment Development Department is still handling possible cases of fraud, to which Daniela Urban, executive director of the Center for Workers’ Rights, says “it’s clear EDD does not have a standardized process of reviewing these documents.”
Last month, the Employment Development Department froze approximately 345,000 disability insurance claims that had been flagged as suspicious. EDD announced Thursday that it suspects 98% of the 27,000 medical providers associated with those claims are fraudulent. EDD said that only 485 medical providers have verified their identity.
EDD has paid over $20 billion worth of fraudulent claims during the pandemic, and continues to struggle to effectively isolate fraudulent claims. EDD noted Thursday that some legitimate providers and claimants were caught up in the mass freeze and will have to go through additional verification procedures before payments can resume.
One of those legitimate claimants caught up in EDD’s confusion is Erick Robles, a Hollister resident and contractor who went on disability this fall. When his payments stopped in December, he says EDD told him “there’s nothing we can do.” Robles says of the situation “this is like an unfair science experiment.”
EDD is also requiring 1.4 million recipients of federal pandemic unemployment benefits to retroactively prove their eligibility or repay the money with a substantial fine.
These issues with EDD’s unsatisfactory handling of fraudulent claims comes among another major challenge for California: employment insurance debt. As of January 25, California had borrowed nearly $20 billion from the federal government to pay unemployment claims. Governor Gavin Newsom has proposed paying down $3 billion of that debt, but business groups – which finance the state’s unemployment insurance fund – say it’s not enough. California currently has the highest unemployment rate in the nation at 6.5%, with nearly 60,000 new unemployment insurance claims being submitted last week.
Photo Cred: Miguel Gutierrez Jr., CalMatters
