In summary

The Employment Development Department says it suspects 98% of the 27,000 medical providers associated with disability claims are fraudulent.

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Two years into the pandemic, fraudsters continue to target California’s unemployment department.

The Employment Development Department, which last month froze about 345,000 disability insurance claims it flagged as suspicious, announced Thursday that it suspects that a whopping 98% of the 27,000 medical providers associated with those claims are fraudulent. So far, EDD said, only 485 providers have managed to verify their identity. The agency couldn’t say how much money it might have paid for those scam claims.

Although EDD has made progress on key reforms after paying at least $20 billion worth of fraudulent claims amid the pandemic, challenges remain. The agency noted Thursday that some legitimate providers and claimants were ensnared in the mass freeze and will have to go through additional verification procedures before payments can resume.

  • One such claimant is Erick Robles, 35, a Hollister resident and contractor who went on disability this fall. His payments stopped in December, he told the San Francisco Chronicle, and he said that EDD told him “there’s nothing we can do.”
  • Robles: “This is like an unfair science experiment.”

EDD is also requiring 1.4 million recipients of federal pandemic unemployment benefits to retroactively prove their eligibility or repay the money plus a hefty fine — but 1.1 million cases remain unresolved.

And Daniela Urban, executive director of the Center for Workers’ Rights, told the Chronicle that “it’s clear EDD does not have a standardized process of reviewing these documents.”

  • In one case, she said, husband-and-wife street vendors submitted identical eligibility information to EDD, which accepted the wife’s documents but rejected the husband’s.

Friday, Gov. Gavin Newsom announced that Rita Saenz, EDD director since 2020, is stepping down and that he is appointing Nancy Farias, the chief deputy director of external affairs, legislation and policy since 2020, to replace her. Saenz “spearheaded important reforms at the Department to better serve working Californians, prevent fraud and hold bad actors to account,” the governor said in a statement.

Another looming challenge for the state: Its growing unemployment insurance debt. As of Jan. 25, California had borrowed nearly $20 billion from the federal government to pay jobless claims — accounting for 49% of all outstanding debt owed by states, according to the California Budget & Policy Center. Though Gov. Gavin Newsom has proposed paying down $3 billion of that debt, business groups, which finance the state’s unemployment insurance fund, say it’s not enough. Other advocates say it’s time to overhaul how the fund is structured.

Other California employment updates:

  • Californians submitted nearly 60,000 new jobless claims for the week ending Jan. 22, according to federal data released Thursday. Although that’s a decrease of nearly 3,000 from the week before, it still accounts for more than 22% of new claims nationwide.
  • The Golden State has the highest jobless rate in the country at 6.5%, the feds revealed this week.
  • Newsom announced Thursday that California has signed the Equal Pay Pledge — reaffirming its commitment to closing the gender pay gap — and established the state’s first Chief Equity Officer position.
  • And the state launched a $185 million jobs program for disadvantaged youth and young adults.

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The coronavirus bottom line: As of Wednesday, California had 7,629,666 confirmed cases (+0.8% from previous day) and 78,571 deaths (+0.3% from previous day), according to state data. CalMatters is also tracking coronavirus hospitalizations by county.

California has administered 69,018,341 vaccine doses, and 72.8% of eligible Californians are fully vaccinated.

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1. CA’s omicron policy, in hindsight

Illustration by Miguel Gutierrez Jr., CalMatters
Illustration by Miguel Gutierrez Jr., CalMatters

Although the omicron wave appears to have peaked in California, different parts of the state are reacting differently. San Francisco, for example, announced Thursday that starting Tuesday, fully vaccinated people no longer have to mask up in gyms and offices, while unvaccinated residents can enter indoor restaurants, gyms, bars and sports arenas as long as they have proof of a recent negative test. However, Oakland on Tuesday will begin requiring proof of vaccination to enter indoor restaurants, bars, theaters and other businesses.

The contrasting approaches raise questions about how California might have better handled the omicron surge. Could the state have struck a more effective balance between keeping workers safe, curtailing the worst of the spread and avoiding cascading labor shortages? And what can state lawmakers do now to prepare for another variant? Ben Christopher and Grace Gedye explore some potential answers in the wrap-up to CalMatters’ “Sick and Tired” series on omicron’s impact on California’s workforce.

And CalMatters’ Julie Cart takes a look at how omicron has pushed state and local governments to find creative ways of issuing building permits, running libraries, collecting garbage and holding meetings. But while these innovations have streamlined government services, they’ve also made it harder for residents without computers or who don’t speak English to access key programs.

2. Capitol gears up for big votes

The California State Capitol dome in Sacramento. Image via iStock
The California state Capitol dome in Sacramento. Image via iStock

Grab some popcorn — you’ll need it Monday, when the state Assembly takes do-or-die votes on a slew of ambitious and controversial bills after declining to act on them Thursday. Why are the votes do-or-die? Because the bills, which failed to pass the Assembly last year, face a Jan. 31 deadline to clear their house of origin and stay alive. Among the proposals we’re watching: one that would create a state-funded single-payer health care system; one that would launch a state-appointed council to negotiate wages, hours and work conditions for the entire fast food industry; and another that would force property owners in rent-controlled jurisdictions to hold onto their buildings for at least five years before invoking the Ellis Act, which gives them a path to exit the rental market and evict tenants.

Leaving the vote until Monday gives lawmakers more time to rustle up support for their bills — a more challenging proposition than usual given that four Democratic Assembly seats are currently vacant. And the stakes are high, especially in an election year: The California Democratic Party’s progressive caucus warned Thursday that it will seek to block party endorsements for any assemblymember who votes against the single-payer proposal.

Another sign that legislators may be trying to make their proposals more amenable: last-minute amendments introduced Thursday.

  • The fast-food bill no longer grants the state-appointed council subpoena authority. (However, the state Department of Industrial Relations, which would oversee the council, has its own subpoena power.)
  • And small landlords are now exempted from the restrictions outlined in the Ellis Act bill.

3. Environmental proposals spark debate

A worker installs solar panels in Hayward on April 29, 2020. AP Photo/Ben Margot
A worker installs solar panels in Hayward on April 29, 2020. Photo by Ben Margot, AP Photo

Wonky debates over California environmental policy seem to be soaking up the national spotlight these days. Here’s a look at a few top talkers:

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CalMatters commentary

We need a national paid family leave policy: As the first woman to serve as the mayor of Eastvale and as a new mom, I’ve seen firsthand how women’s leadership potential will remain untapped without paid family leave, writes Jocelyn Wow, legislative advocacy director of Ignite.

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Other things worth your time

‘You should be voted out of office.’ Elon Musk tweets about California elected official. // Sacramento Bee

Oakland Unified considers closing up to 13 schools permanently, school board member says. // KTVU FOX 2

Oakland Unified delays vaccine mandate until fall. // Oaklandside

Student activists united by COVID-19 school safety concerns. // Los Angeles Times

Why aren’t more counties taking California’s thousands of free masks? // KCRA

15-month-old dies of COVID-19 in county’s youngest coronavirus fatality. // Los Angeles Times

California lawsuit settlement limits ICE from re-detaining immigrants freed because of pandemic. // Los Angeles Times

California Senate aims to limit ‘junk science’ in courtrooms. // Associated Press

Supervisors shoot down measure to speed development of middle-class housing. // San Francisco Standard

They bought a Bay Area house sight unseen. // New York Times

Why Hollywood big shots are fleeing Los Angeles. // The Wrap

Sacramento County Sheriff resolves most sexual assault cases without arrest or trial. // CapRadio

Adult who, at 17, molested child is sentenced to juvenile facility. // Los Angeles Times

New bill would force California courts to clear cannabis convictions faster. // Los Angeles Times

California’s marijuana ‘social equity’ programs leave many depleted. // Los Angeles Times

Reparations are for descendants of Black slaves, Weber says. // Associated Press

Two charged with possessing 300k fentanyl pills in ‘biggest ever’ California bust. // Mercury News

DA Spitzer launches reelection campaign framed as fight against Gascon. // Orange County Register

LAPD emails reveal fallout of Citizen’s botched manhunt. // Vice

Sacramento sheriff sued after jail attack left mentally ill inmate in coma. // Sacramento Bee

Chula Vista rejects proposed psychiatric hospital after large community opposition. // San Diego Union-Tribune

One of the last men who served time at Alcatraz. // New Yorker

What happens when California’s millions of electric car batteries get old? // Mercury News

Court sides with city in its claim that onerous PG&E requirements hold up projects. // San Francisco Chronicle

If the Supreme Court rolls back the Clean Water Act, California will be ready — thanks to Trump. // San Francisco Chronicle

California museum returns massacre remains to Wiyot Tribe. // Associated Press

See you Monday.

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Emily Hoeven wrote the daily WhatMatters newsletter for three years at CalMatters . Her reporting, essays, and opinion columns have been published in San Francisco Weekly, the Deseret News, the San Francisco...