Members of the California Senate Republicans are one step closer to reforming the Employment Development Department (EDD) with the passage of Senate Bill 58 authored by Senate Republican Leader Scott Wilk (Santa Clarita), Senate Bill 39 by Senator Shannon Grove (Bakersfield), and Senate Bill 232 by Senator Jim Nielsen (Tehama). All three EDD bills recently passed out of the Assembly Committee on Insurance with unanimous support and will now head to the Assembly Committee on Appropriations, where their fiscal impact will be considered.
- SB 58 (Wilk) would require the Employment Development Department’s (EDD) to stop including full social security numbers on its correspondence and to identify fraud prevention efforts it can adjust to improve effectiveness during periods of high demand for benefits, and to designate a single unit responsible for coordinating fraud prevention and align the unit’s duties with best practices for detecting and preventing fraud.
- SB 39 (Grove) would require the Department of Corrections and Rehabilitation to cross-reference prisoner records with EDD.
- SB 232 (Nielsen) would codify a number of audit recommendations to modernize EDD, including implementing a policy that establishes a process for tracking and periodically analyzing the reasons why unemployment insurance claimants call for assistance as well assessing the effectiveness of its call center operations and implement a policy for tracking and monitoring its rate of first-call resolution.
“Senate Republicans are cleaning up the mess at the EDD after a year of failures,” said Senate Republican Leader Wilk. “Republicans are leading the effort to protect unemployed Californians from identity theft, protect taxpayers and employers from billions of dollars lost to unemployment insurance fraud, and better prepare our state’s response for the next economic recession."
State Audit Report 2018‑129, State Audit Report 2020-628.2, and State Audit Report 2020‑128/628.1 are the respective State Audit Reports that led to the introduction of SB 58, SB 39, and SB 232 by Senate Republicans.
During the first eight months of the pandemic, it is calculated that over $10.4 billion in potentially fraudulent claims were paid out, with more recent estimates being as high as $30 billion by the end of the pandemic, many of which were paid out to California incarcerated individuals. During that same period, EDD mailed out 38 million pieces of mail containing full social security numbers, a three-fold increase from 2019, when the Auditor identified the risk.
While the state has reopened, EDD continues to fail Californians. It was reported yesterday that the EDD backlog of unemployment insurance claims awaiting action and claims pending certification continues to grow. From June 12 to June 19, the number grew from 1,126,091 to 1,127,878. Worse, the call center reported four million calls into EDD during the last week of May, and only about six percent of them were answered.