EDD Reform Bills Pass First Committee

Legislation advanced would alleviate the issues faced by millions of Californians in accessing unemployment benefits during the pandemic

For immediate release:

Sacramento, CA--Three bills aimed at reforming the California Employment Development Department’s (EDD) unemployment insurance (UI) program passed the Assembly Insurance Committee today. The bills that advanced are part of a broader legislative package announced in February that would enact crucial oversight and consumer protection measures, ensure claimants get timely access to benefits, and address fraud.

Since the start of the pandemic, there have been widespread reports of the trouble at the EDD. Millions of Californians have struggled to access the unemployment benefits they are legally entitled to, leaving many vulnerable without income or recourse during a pandemic and recession. Despite mass fraud prevention account freezes that harmed thousands of legitimate UI claimants, EDD has still fallen prey to rampant unemployment fraud, most egregiously coming out of California prisons. 

Bureaucratic inefficiencies, antiquated technology, problematic contracts with EDD vendors, and poor planning going back decades brought the EDD to the place it finds itself in today. Multiple audits and reports have concluded that the problems facing the EDD have been present for decades with little effort on the part of the EDD to address these glaring issues.

“Many of the issues EDD is facing today have been known since the Great Recession,” said Assemblymember David Chiu (D-San Francisco). “Almost nothing was done over the years to plan for another economic downturn. Our most vulnerable Californians have struggled with this agency for decades, and I'm pleased these bills advanced today to help ensure Californians get the benefits they are entitled to.”

Assembly Bill 401 authored by Assemblymember David Chiu (D-San Francisco), Assembly Bill 74 by Assemblymember Lorena Gonzalez (D-San Diego), and Assembly Bill 397 by Assemblymember Chad Mayes (I-Yucca Valley) were approved by the committee today. 

AB 401 by Assemblymember David Chiu would take steps to ensure that all Californians seeking services provided by the EDD have the timely language support necessary to access benefits. Accessing unemployment benefits can be a frustrating months-long process for any Californian, but those difficulties are compounded for Californians with limited English proficiency. In fact, the challenges are so significant that the Governor’s EDD strike team report concluded that UI claimants who do not speak English face “insurmountable barriers” to receiving benefits. While EDD provides some forms and services in Spanish, those services are not nearly comprehensive enough to be effective and there are virtually no resources for the 2.4 million Californians who speak a language other than Spanish or English. 

AB 74 by Assemblymember Lorena Gonzalez would provide individual claimants with the option to choose to receive their unemployment benefits via direct deposit. The EDD has contracted with Bank of America to provide benefits to UI claimants through Bank of America debit cards. However, legitimate claimants caught up in the debit card freezes to prevent UI fraud have struggled to get their benefits reinstated as the EDD and Bank of America claim that only the other entity can restore the debit card accounts.

To fix this situation, AB 74 would require the EDD to make benefit payments available to the claimant through direct deposit for unemployment insurance and state disability and paid family leave programs. California is one of three states in the country not to currently offer a direct deposit option.

In order to continue receiving benefits, UI claimants are required to complete biweekly certifications with EDD to confirm that they remain unemployed and able to work, but this certification process is convoluted and contains questions that can be misleading. A simple mistake answering one of these questions can put a stop on benefits and jeopardize a claimant’s ability to participate in unemployment insurance extension programs passed by Congress during the pandemic. 

To rectify this, Assemblymember Chad Mayes’ AB 397 would ensure claimants who have accidentally answered a certification question incorrectly and received an overpayment are not locked out of their employment benefits. It also requires the EDD to send a clear notice of the incorrect statement and allow the individual to cure the misstatement.  

These bills are expected to be heard in the Assembly Appropriations Committee in the coming weeks.