Feb 1, 2021
At the end of December, California’s Employment Development Department (EDD) suspended 1.4 million active claims and stopped sending unemployment checks to those claimants. Officials say that as much as $11 billion, or about 10% of what they paid out as unemployment benefits since March, may have gone to organized criminal gangs, often linked to prisons, who posed as unemployed workers.
That is in fact an admission of a massive security failure of California’s unemployment insurance system—that is, of the officials who run the EDD. And sure enough, a recent state audit found that the EDD had failed to update its fraud detection system for months, despite warnings from other government agencies about the likelihood of substantive fraud.
And these same EDD officials who did nothing about fraud for months, who are they now making pay for their own monumental failure? California’s unemployed!
It’s obvious that a big part of the suspended claims are legitimate ones. Gig workers, such as Uber and Lyft drivers, have specifically been targeted. One former Lyft driver said that her claim was suspended, even though the EDD had requested her to file documents twice before, and had verified her identity.
And this is only the last outrage the EDD has been putting people through since last spring. Right now, more than 900,000 unemployed workers in California have not even gotten their first checks yet!
As for fraud, whatever the real number of fraudulent claims is, this whole fraud story is being used to deny hundreds of thousands more the unemployment benefits they deserve, and desperately need to live.