California Officials Say Unemployment Pay for Workers Was Not a Priority

A state oversight agency found that CA does “not prioritize getting benefits to workers” while 6 million are left in limbo

A study released Monday by the state’s Legislative Analyst’s Office found that California delayed or wrongfully denied unemployment benefits for about six million people during the pandemic, CalMatters reports. According to the agency, state policies “do not prioritize getting benefits to workers quickly.”

The report states that payments were delayed for about five million people, which is nearly half of all workers who sought benefits during the height of the COVID pandemic. The California Employment Development Department also denied benefits to 3.4 million workers in that period. Of the 200,000 people who tried to appeal their denials, 80 percent are said to have won their cases.

“We believe many of the workers who did not appeal likely were eligible, meaning the state may have improperly denied one million additional claims,” said Chas Alamo, principal fiscal and policy analyst for the Legislative Analyst’s Office.

The report ultimately blamed the continual delays and denials on the base design of California’s unemployment program, which is said to focus more on the businesses that fund the program than the workers who pay into and rely on it.

Whenever a former employee is awarded unemployment benefits, the former employer’s tax rate rises. Between 2019 and 2021, more than half of the Employment Development Department’s decisions to deny benefits were overturned on appeal. In other states, this rate was less than 25 percent, according to the report.

“State policies and practices formed under this orientation would tend to emphasize holding down business costs potentially at the expense of making sure eligible workers can get benefits easily,” the report said.

During the pandemic, the Employment Development Department also failed to address any benefit denials, with no system in place to process unopened mail, and the agency answering less than one percent the calls it received. The report also noted that California had denied benefits even though the claimants were eligible.

In a case the Legislative Analyst’s Office reviewed, the state denied a claim because the worker was caring for her children while unemployed, thus making her “unavailable for work.” However, state rules allow parents to look after their children while unemployed, provided child care willbe arranged once they get a new job.

“Individually, policies and actions aimed at preventing fraud may appear justified and reasonable,” the report said. “Viewed as a whole, however, the collection makes getting benefits unreasonably difficult for eligible workers.”

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