Why thousands of Californians are in limbo for jobless benefits

Many Californians who lost jobs during the pandemic have been facing ongoing battles to receive unemployment benefits.

During the first few months of the COVID shutdown, the state Employment Development Department became inundated with 29 million jobless claims. Since then, it has paid out $188 billion in unemployment benefits.

But as CalMatters’ investigative reporter Lauren Hepler writes, many Californians are still struggling to receive their money.

When the pandemic hit, state and federal officials waived many standard application requirements for unemployment benefits. As the claims flooded in, the department estimated that it paid as much as $31 billion to scammers in its rush to distribute funds. (This fraud is one of the key reasons Republicans are campaigning against Julie Su, President Biden’s nominee for U.S. labor secretary, who oversaw the department’s operations at the time serving as state labor secretary.)

Investigators say organized identity theft rings, dodging the agency’s automated application systems, were responsible for most of the fraud. But department anxiety about illegitimate claims has ramped up — especially considering that California still owes the federal government $19 billion in unemployment debt.

• Jenna Gerry, senior staff attorney at the National Employment Law Project: “It was a perfect storm. Instead of being like, ‘Wow, that was really bad. How do we make reforms now?’ … All people want to lift up is fraud, and not actually look at the systemic issues.”

In the fallout, the analyst’s office for the Legislature estimated that about 1 million workers have been wrongly denied benefits, many on the basis of alleged fraud. To get their benefits, workers must request the department to review their case, where some are transferred to another labor agency called the California Unemployment Insurance Appeals Board. There, the average case languishes for 139 days, compared to the federal government’s wait time target of 30 to 45 days, Lauren reports.

In the summer of 2020, the vast majority of cases flagged for manual reviews appeared to be innocent mistakes on forms caused by confusion, clerical errors, language barriers or disagreements between workers and employers. Just 0.02% of the 1.3 million cases flagged were likely fraud and “the cost of finding that small number of imposters is extremely high,” according to an Employment Development Department Strike Team report.

The appeals board said judges are now doubling their rate of closing cases per month since before the pandemic and it’s setting up an online portal for workers to track their cases. It has also hired and trained 105 judges and 100 staffers to help clear the backlog, however the assistant director of the appeals board, Gregory Crettol, estimates it will “likely take several more years” until case numbers return to normal levels.

Focus on homeownership: CalMatters is hosting a panel discussion 8:30-9:30 a.m. Tuesday, May 23. In “Generation Locked Out: Is Homeownership in California Only for the Rich?” reporter Alejandro Lazo will moderate a panel of experts and advocates who will discuss the affordability crisis and what it means for first-time homebuyers. Register here to attend in person at our Sacramento office, or virtually.

CalMatters is hosting more public events this year. Read more from our engagement team, check out our calendar and sign up today.

Other Stories You Should Know

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1 Showing teachers the money

You may have heard about a bill to give California teachers a 50% raise over the next seven years. As sometimes happens in the Legislature though, it has been pulled back dramatically. 

In April, Assembly Education Chairperson Al Muratsuchi, a Democrat from Torrance, promoted his bill to increase funding for schools with high-needs students by 50% by 2030-31 — and tie that money directly towards raising school employee and teacher salaries.

But as EdSource reports, critics argued that it would undermine teacher union negotiations and wrestle funding control out of the hands of local districts. 

To address these concerns, Muratsuchi made a significant concession: Instead of raising salaries by a specific percentage, the additional money for the awkwardly-named Local Control Funding Formula would be used with the intent to close the pay gap between teachers and other similarly skilled workers. (Teachers earned 23.5% less than their comparably educated peers nationwide, though that gap shrinks to 17.6% in California.)

• Muratsuchi: “The ultimate goal is to address the crisis of a shortage of school employees by closing the wage gap — rather than focus on an arbitrary number of 50%, not only for teachers but for food service workers, who can make more at McDonald’s.”

The California Federation of Teachers, which sponsored the legislation, said they endorsed the change since it keeps the original goal of raising salaries. The larger California Teachers Association also backs the bill.

But even without this statewide measure, some teacher unions have recently negotiated big raises. On Monday, Oakland teachers ended their week-long strike as they secured a 15.5% wage increase. Earlier this month, teachers in Los Angeles approved a contract to boost their salaries by 21% over three years.

A reminder: California ranks third highest in average teacher salary, according to the National Education Association. In 2021-22, the average salary of a California public school teacher was about $88,000, compared to the national average of nearly $67,000.

2 Newsom signs budget-related bills

From Nicole Foy of the CalMatters’ California Divide team:

Gov. Gavin Newsom signed into law Monday a significant change to the way California farmworkers can organize and vote for union representation.

The law, which allows farmworkers to vote for union representation by signing union authorization cards, called card check, takes effect immediately. Despite the win for labor, the new law rescinds farmworkers’ brief right to vote by mail, as part of a deal with the United Farm Workers union to change legislation Newsom signed last year.

California farmworkers previously voted for union representation via a two-step “secret ballot” process that often took place at their worksite on employer property. The previous version of the law, which went into effect in January, changed that to two options, allowing farmworkers to mail in ballots or vote via card check.

The bill Newsom signed Monday removed the vote-by-mail provision and further clarified last year’s legislation. Grower groups and the California Farm Bureau opposed both versions of the bill, but were especially vocal about the security of mailed ballots.

The California Labor Federation, who sponsored the bill along with United Farm Workers, praised the signing on Twitter, calling it the first private-sector card check law in California. 

“There are 400,000 farmworkers in California who need a fair system to have a union,” said Antonio de Loera-Brust, spokesperson for United Farm Workers. “We are ready to get started.”

The governor also signed four other “early action” budget trailer bills Monday, including:

• AB 112, which creates a $150 million no-interest loan program for distressed hospitals. On Friday, Newsom allocated that money in his revised May budget.

• AB 111, which shields student loan debt relief from state income taxes.

3 On academic probation

Failing a college exam is stressful enough — but being put under the punitive label of “academic probation” when your GPA falls below 2.0 can lead to feelings of isolation and stigmatization.

As Rocky Walker of CalMatters’ College Journalism Network explains, placing students on academic probation serves as a wake-up call from universities: Shape up or risk getting kicked out of school altogether. 

But without proper academic support and counseling, students can continue to flounder. One Sacramento State study found that students on probation were twice as likely to leave the university compared to students who had similar academic records but were not on probation.

Statewide, resources for students on probation can be inconsistent. California community colleges are required by law to provide counseling and other services. California State University recommends providing support, but it isn’t required. And the University of California leaves standards for academic probation up to the individual campuses.

A handful of schools, however, are working to provide more aid. Cal Poly Humboldt is changing the term “academic probation” to academic notice, and students will be required to meet with a faculty advisor or a counselor to draft a plan to improve grades. And under its RESET program, Cal State Fullerton students go through a five-week course that includes advice on improving grades and online chats about mental health.

Have a question about California higher education? Fill out this form and it could be addressed in a future “Ask CJN.” We now have a Spanish version of the form.

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San Diego to sue SeaWorld for $10M in back rent during pandemic // San Diego Union-Tribune

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Healthcare workers at five CA hospitals vote to authorize strike starting May 22 // The Mercury News

70% of newly sold homes in Atherton aren’t owned directly by people // San Francisco Chronicle

CVS to pay California counties $7.5M over expired products // North Bay Business Journal

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NIMBYism over housing spans race and politics // Los Angeles Times

Elk Grove will fight state AG in court over affordable housing // The Sacramento Bee

SF’s top-paid employee made $726K after city fired him // The San Francisco Standard

Biden world goes to the mat to get Julie Su confirmed as US labor secretary // Politico

Gloria Molina, who blazed paths across LA politics, dies at 74 // Los Angeles Times