Amid coronavirus, California faces massive unemployment claims

A La Jolla business displays a COVID-19-related sign.

March 26, 2020 5:13 PM PT

SACRAMENTO — California faces an unprecedented number of unemployment claims amid the coronavirus pandemic, sparking emergency actions by the state agency that handles jobless benefits and a waiting game to see whether the state can keep up.

The state’s Employment Development Department processed 186,809 claims for unemployment benefits last week, up from 57,606 the week before, according to weekly data released Thursday by the U.S. Department of Labor. The total last week was 363% higher than the number of claims processed during the same week last year.

Gov. Gavin Newsom said Wednesday that those figures are only rising. In the past 12 days, Newsom said the state has received 1 million applications for unemployment benefits, a figure highlighting the sharp economic impact crisis-related business closures will have on California.

“To have an organization be able to ramp up overnight at that high of a level is very difficult,” said state Assemblyman Phil Ting (D-San Francisco). “We’ve had a significant number of constituents say they are having a hard time reaching EDD on the phone or, due to the shelter in place order, being able to go into the office for help.”

Frustrated filers took to social media to vent about problems reaching a “real person.” Those trying to file unemployment claims said it has been nearly impossible to reach a representative on the phone to ask a question. The department’s call center is open only four hours a day Monday through Friday, from 8 a.m. to 12 p.m. The department said it has no plan to extend the hours because it needs as many workers as possible processing claims.

Edna Zhou, who was laid off from her public relations job last week in San Francisco, said she’s found herself in a merry-go-round of recorded phone messages while trying to reach a person who could help.

“I just want to get my claim in,” said Zhou, 30. “I have bills to pay. It’s really frustrating.”

Zhoa said she knows she’s not alone in desperately needing unemployment pay.

California’s rise in unemployment claims comes as the number of Americans applying for unemployment benefits has shot to unprecedented levels — 3.3 million people filed first-time jobless claims last week, according to the latest Labor Department data.

The nationwide surge was five times greater than any single week reported to the Labor Department since it began recording the data in 1967.

Officials at the California Employment Development Department, which handles state claims for unemployment, disability and paid family leave benefits, said so far they are not expecting major delays in getting checks to those who are out of work. In response to the crushing caseload, the department reassigned hundreds of workers to help process claims while moving to a round-the-clock operation.

“It’s an unprecedented number of claims, no doubt,” said Loree Levy, deputy director of communications at EDD. “It’s all hands on deck.”

Levy said it typically takes three weeks from the time when a person files a claim to when they receive a payment. Whether the department can keep that timeline intact is being closely watched. The independent Legislative Analyst’s Office wrote in a report last week that the massive workload would mean much longer wait times, but Levy said the department is optimistic that “clean claims without complicated issues” will still get out the door in three weeks.

“We are still hoping that this onslaught can be streamlined and that people won’t see much of a delay,” Levy said.

Earlier this month, Newsom announced that the state was waiving its standard one-week waiting period so that those who lose their jobs or have their hours reduced can apply for benefits right away. California’s unemployment benefit, funded by a payroll tax on employers, provides individuals with weekly checks between $40 to $450 for up to 26 weeks. The federal stimulus package awaiting a vote in the House would provide another $600 in unemployment benefits to those out of work.

Newsom said those added benefits are desperately needed, particularly since many Californians have struggled to regain their financial footing from the Great Recession.

“People are older and still struggling,” Newsom said Wednesday. “And so these are individuals that once again are disproportionately impacted by this moment. And that’s why I say, we need to focus on those faces, on their stories, not just the face of government, not just the face of business, but on the faces of individuals, day in and day out, that are struggling to make ends meet, struggling to feed their families and themselves.”

The state’s employment department shifted its employees to help process the claims while asking former staff members and state workers with claims processing experience to return to work. Levy said retirees are filling some positions and the department will hire where it can, but the immediate need makes it difficult to train new staff on unemployment laws.

While staffers at California’s unemployment insurance fund wade through the onslaught of claims, concerns remain that the agency might be overwhelmed should the current economic downturn trigger a prolonged recession. In 2009, the state system exhausted its reserves and had to seek loans from the federal government. By 2012, those loans totaled $10.2 billion.

Though the economic recovery replenished the funds by 2018, analysts have warned that structural problems remain — many dating back to a decision by state lawmakers two decades ago to raise benefits without a corresponding increase in payroll taxes.

Chas Alamo, an analyst for the Legislative Analyst’s Office, said the new surge in claims is “absolutely going to present challenges.”

“But it’s too soon to know whether the steps taken to date have been sufficient,” Alamo said.

Lawmakers are paying close attention to the potential for more problems.

“This crisis is leaving too many Californians uncovered and unprotected,” said Sen. Ben Allen (D-Santa Monica). “Our residents need additional help and coverage — fast. So I appreciate [EDD’s] efforts so far and am hopeful that the federal aid package will be very helpful, but I remain deeply concerned about the logistics associated with everyone getting the help they need now.”

Times staff writer John Myers contributed to this report.