Assemblymember Chiu Statement on EDD Strike Force Report and Recommendations

For immediate release:

Assemblymember David Chiu (D - San Francisco) today issued the following statement after the Employment Development Department (EDD) Strike Team created by Governor Gavin Newsom released its report and recommendations on Saturday night:

"The strike team deserves real credit for taking on the unenviable task of fixing an agency that has been broken for decades. Their report documents how EDD has failed the people it serves in almost every imaginable way. It confirms what much of the Legislature has been saying for months as summarized by a bipartisan letter sent early August.  

The report revealed that at least 1.6 million Californians and counting have unfulfilled benefits claims. The size of this backlog is shockingly large. We have been frustrated at EDD’s ever evolving lowball estimates of the backlog, and we now know why a firm number could not be given. EDD never had a mechanism to track the size and scope of the backlog in a data-driven way. As now required by the Legislature, we appreciate EDD’s commitment to providing an ongoing, transparent dashboard with accurate metrics.

In July, we were told EDD anticipated eliminating the backlog of claims by the end of September but now understand that will not occur until the end of January. While appreciating the revised accuracy of the timeline, I am concerned this is too little, too late for Californians experiencing extreme financial stress as a result of EDD’s failures. It is highly unsatisfactory that people who have waited since the pandemic began may continue to wait the better part of a year for assistance.

The strike team confirmed that EDD’s culture of fear prioritized preventing fraud over paying out benefits. Unfortunately, its identity verification process both failed to stop significant levels of fraud and blocked honest Californians from receiving the benefits they are due. I am glad the strike force recommended a new tool to speed benefit delivery and reduce fraud, although it is frustrating that a two-week reset is necessary. While the strike team was not charged with holistically assessing fraud risks, the public and the Legislature deserve further answers about the likely magnitude of fraud.

The recommendations on both deploying staffing resources and improving the user experience are excellent. That being said, as pointed out in the report, I am highly concerned about the real and ongoing challenges for those who only have a mobile phone, for Californians with disabilities, and for Californians with limited English proficiency who ‘face insurmountable barriers.’ 

The report chronicled decades of technological obsolescence and rightfully recommends that EDD’s technology modernization project be paused and recalibrated. Since EDD did not learn this same lesson after the Great Recession, the public deserves a real plan to ensure EDD’s technology does not fail again. Also, the report does not address how the procurement process can be reformed to bring in truly modern technology solutions or EDD’s problematic dependence on large vendors like Deloitte, which was paid $259 million over the past decade to perpetuate EDD’s dysfunctional IT system.

I hope the strike team members continue to have deep involvement in implementing the over 100 report recommendations. As a member of the budget subcommittee with oversight on EDD, I will continue working with colleagues to address these issues and ensure the strike team’s recommendations are fully implemented as quickly as possible."