Hundreds of thousands of out-of-work Californians who’ve been waiting weeks — and in some cases months — for their unemployment benefits will finally be paid.
The Employment Development Department (EDD) announced Thursday that it will begin paying unemployment insurance claims for applicants who have certified for benefits already and received at least one week of benefits, but who have been pending for at least two weeks.
Previously, when EDD flagged a claim for eligibility issues, the agency would put a stop payment hold on that application while it was investigated. This is one big reason why unemployment applicants end up in the notorious “pending” status, which, for some, has seemed interminable.
Now, the agency will instead issue “conditional payments,” meaning that if EDD can’t resolve questions of eligibility within two weeks, claimants will continue to be paid. This way, applicants won’t need to go without benefits or worry about paying for necessities during EDD’s investigation.
If in the course of its investigation, EDD later decides the applicant was, in fact, ineligible for benefits, that person will then need to reimburse EDD for the money paid during the weeks they were ineligible. However, any overpayment can be waived “if the claimant demonstrates a financial hardship and the overpayment was not the claimant’s fault or due to fraud,” EDD officials said in a statement.
“This is a monumental change by EDD that will allow more claimants to be paid on time,” said Daniela Urban, executive director of the Center for Workers' Rights.
Urban said her group has been in negotiations with EDD around this change for some time. The center even filed a class-action lawsuit complaint and proposed settlement in Alameda County's Superior Court on Thursday. Urban now says EDD's agreement resolves the issue of the complaint.
One of the most important potential impacts of the change would be helping to decongest EDD’s infamously large backlog of pending claims. As of July 17, there are a combined 1,096,837 claims pending.
In a statement, EDD officials pointed to the higher volume of claims filed during the pandemic, which resulted in significant processing delays, and has forced many people “to go weeks without payment.”
Urban has said EDD’s policy of putting stop payments on continuing claims — meaning claims that EDD already deemed eligible — while it was investigating questions of eligibility, was a huge driver behind the backlog and EDD's notoriously overloaded call center.
“Once a claimant gets into this pending status or has a stop alert placed on their account, then it's impossible for them to get benefits no matter what they do, because it's in EDD's hands and they haven't told claimants what needs to be provided, if anything, to remove that status," Urban told KQED in June.
"If [EDD] were able to ... simply pay benefits while they investigate whatever issue it was, then the number of calls each week that would drastically reduce because people would be getting payments in the meantime and wouldn't be so concerned about putting food in their mouth that they feel like they need to call EDD every hour to try to get it remedied," she said.
EDD call center data for July 10 through July 17 shows 248,165 calls answered by staff out of 3,037,306 calls entering the call center. The data say people were calling close to 12 times before getting through to anyone.
Abdulkarim “Abdul” Adam lives in Hayward and is likely to be one of the more than 100,000 applicants whose benefits will be unlocked by this change. Before he was laid off last March, he worked as a bus driver for a private company that serves the greater Bay Area. He received unemployment regularly until he needed to renew his claim after a year, and says he’s been in pending status since March 2021.
“I certify every two weeks. I call every day and I didn’t have no luck," he said. "One time I called by accident [on the employer line] and they answered, and I said, ‘Can you transfer me [to] somebody to take my case from pending to payment?’ They said, ‘no.’”
Adam has moved in with two of his children, who are helping to support him while he continues to look for work.
He said, when he finally does get his money, he’ll use it to pay off bills and loans he’s taken.
Urban says new leadership at EDD gave momentum to conversations around the "conditional payment" change. At the end of December 2020, Gov. Gavin Newsom appointed Rita Saenz the new director of EDD. Longtime staffer Sharon Hilliard retired after taking on the director role in February 2020.
"We did feel the impact of the change in leadership at EDD," she said, "and we're thankful that they worked with us and heard our concerns about not only the need to roll out of this conditional pay program but the specifics of how to do it to best protect claimant rights.”
EDD officials said in a statement that the agency will begin informing claimants of the new system this week, and Californians could begin seeing these “conditional” payments as soon as July 23, 2021.
“We know many claimants who cleared fraud filters and verified identity have been waiting too long for payment,” Saenz said in a statement. “In response, we are launching a new program that will help many Californians get benefits faster.”