EDD suspends 1.4 million jobless payments

The state’s embattled labor agency says it has suspended payments for well over 1 million claims in response to widening fraud woes, a fresh blow to California workers who lost their jobs amid coronavirus-linked business shutdowns.

The Employment Development Department has begun to notify people that their unemployment payments were suspended because of suspicions their accounts were linked to fraudulent activity.

The state agency began to more closely scrutinize unemployment claims towards the end of 2020 and ahead of the start of extensions of unemployment benefits paid by the federal government.

“The EDD applied additional fraud detection screening to existing claims established during the pandemic,” the EDD said in a statement emailed to this news organization. “About 3.5 million of them were deemed potentially fraudulent.”

Of the 3.5 million, an estimated 1.9 million had already been disqualified by the EDD for unspecified reasons, according to the state agency.

“Payment was suspended on 1.4 million claims,” the EDD said.

The EDD said it was moving quickly to attempt to reach the workers associated with the 1.4 million claims that were suspended.

“Most of these individuals associated with them are receiving emails from EDD in their Unemployment Insurance account directly,” the EDD said. “The rest are being sent mail via U.S. Postal Service directly to their address on file.”

The halt in payments comes at a time when the EDD is reporting that its backlog of unpaid unemployment claims is again swelling.

The EDD, criticized for antiquated technology and a call center that can’t handle the volume of workers who need help getting their money, may have paid out an estimated $2 billion in fraudulent claims.

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The brutal bottom line: Many California workers are failing to receive the unemployment benefits they are seeking, either due to fraud concerns or because they are trapped in a logjam of unpaid legitimate claims.

Some have been without work since the coronavirus began to ravage the state and businesses were ordered closed to help combat the deadly bug. Business shutdowns began in mid-March and have remained in place to one degree or another since then.

The EDD made it clear that it’s up to workers to follow a process to prove that their unemployment claims are legitimate.

“They’re being notified about what information will be needed from them to verify identity or eligibility in order for payments to resume,” the EDD stated.

The agency warned workers that they must respond or face more dire circumstances.

“If no official response is received, claims will be canceled,” the EDD said.

State Sen. Jim Nielsen, a Republican from Northern California, harshly criticized the latest blunders at the EDD.

“This is more evidence of an out of control agency,” Sen. Nielsen said of the EDD in comments provided to this news organization. “Because of their own sustained incompetence, they have now suspended claims.”

Adding to the difficulties facing California workers who have lost their jobs is a widening backlog of unpaid claims reported by the EDD.


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