Unemployed Californians face months of delays when appealing denial of jobless benefits

SACRAMENTO —  Californians who believe their unemployment benefit claims have been wrongly denied are facing significant delays in having their appeals addressed during the COVID-19 pandemic, waiting an average of 92 days for assistance — more than double the wait time before the pandemic put millions of residents out of work.

The sluggish appeals process marks another setback for the the state after its beleaguered Employment Development Department was overwhelmed by a record-setting 20 million filings since the pandemic began, leading to state audits that showed poor planning by the agency slowed the approval of millions of claims and made it vulnerable to widespread fraud.

When claims are denied or disqualified, people can file an appeal with the EDD, which reviews the arguments before sending cases they deny to the California Unemployment Insurance Appeals Board for a final decision. The board is independent from the EDD, although both offices operate under the umbrella of the state Labor and Workforce Development Agency.

Appellants argue their case to an administrative law judge employed by the appeals board, and that judge’s decision can be appealed a second time to the five-member board appointed by the governor and the California Legislature.

The number of claims sent to the state appeals board in September through December was double what it was before the pandemic, and 50% higher last month than pre-pandemic levels, according to Michael Cutri, executive director and chief administrative law judge for the board. Last year, Cutri’s agency was sent 223,389 appeals, up from 175,382 sent the year before.

Dan Reeves, the vice chairman of the board, said that the flood of unemployment claims and appeals has been a challenge for the agency, even as it has increased staff and tried to make other improvements in the face of growing demand.

“I know that progress is slow-going, but this is an enormous crisis,” Reeves said during a Wednesday board meeting.

California is currently not meeting the U.S. Department of Labor standard that says 80% of appeals should be acted on within 45 days and 60% within 30 days. From April through January, the board completed action on 53% of claims within 30 days.

State officials note that 46 other states are also not meeting the timeliness standard, which could result in a penalty requiring a corrective action plan for the following year, including additional reporting.

“The judges and staff are working as quickly as possible to resolve UI appeals once received from EDD,” said Board Chairman Marty Block, a former state senator from San Diego.

Much of the delay is occurring in the understaffed and overburdened EDD as it reviews appeals before sending them to the board, officials say.

“EDD recently acknowledged that it is has taken four to six weeks to send appeals to [the California Unemployment Insurance Appeals Board] since December, which makes it virtually impossible for us to improve our timeliness figures,” Cutri told the board.

The appeals caseload is likely to increase in the coming weeks because the EDD in December suspended payment on 1.4 million claims that it thought could be fraudulent, and many have been disqualified. Many of those with disqualified claims say they have legitimate claims but that they have been unable to get the EDD to verify their identities so they have filed appeals.

Kristen Rio, who was a supervisor at a Riverside County casino before the pandemic took away her income, filed documents to prove her identity and eligibility early last year. But she was so frustrated by her experience with the EDD that she hired an attorney, who filed an appeal in early December challenging a decision not to approve her claim on grounds she had not adequately proved her identity.

“It’s been almost three months and I haven’t received a hearing date, a phone call, nothing,” Rio said. “It’s scary. Thankfully I have family [to help], but if I didn’t have that I don’t know what I would have done.”

Board officials say that recent EDD disqualifications based on lack of identity verification are reversed by its judges in 93% of the cases that are appealed.

EDD Director Rita Saenz said Thursday that her agency has hired the firm Accenture to analyze its identify verification and fraud prevention process to find ways to increase the speed and number of claims approved, which would reduce the need for appeals.

“My priority is getting unemployment benefits as quickly as possible into the hands of eligible Californians and stopping fraud before it enters the system,” Saenz told reporters during a teleconference call.

The appeals board has also been hindered by other factors. COVID-19 has forced the board to switch from in-person hearings to remote video sessions, and three of its field offices, including those in Los Angeles and Orange County, have had to briefly close in recent months when employees tested positive for COVID-19.

“Despite our best efforts to maximize telework, office closures continue to present substantial logistics problems,” Cutri told the board in December.

In addition, the appeals board’s staff, including many of its administrative law judges, were included in a state budget-cutting move last July that gives workers two personal leave days per month in exchange for a salary reduction.

Reeves, who was previously the chief of staff to former Senate Leader Kevin de León, urged the board in December to ask for its staff and judges to be exempted from the personal leave policy, in part because 84% of the board’s funding comes from the federal government.

“The processing of these appeals is critical to getting benefits to applicants who may be entitled to those benefits as quickly as possible,” Reeves told his fellow board members. “Those benefits can make the difference between feeding your kids or not or becoming homeless.”

Although the board remains subject to the budget-cutting policy, Assistant Director Lori Kurosaka insists the leave program has not negatively affected productivity at the board.

To attack the backlog, the agency has hired 22 new administrative law judges and 20 support staff in recent months, with more on the way.

Still, delays have meant benefits have not been received when they are desperately needed, said Center for Workers’ Rights Executive Director Daniela Urban. Before the pandemic, appeals were being scheduled within weeks, she said, but that has changed. She said one client of the center filed an appeal at the end of October and a hearing date was only given to him last week.

“It means they are waiting many months for benefits when EDD could clear up information by simply calling the claimant and having them send a more clear picture or a different ID,” she said.

The problems with the appeals process are hitting an agency that has faced controversy before.

The appeals board has long been a soft-landing spot for the politically connected, including legislators after they leave office, paying a $159,000 annual salary to serve on a panel that meets in public once a month. Members say most of their work is done between meetings when they individually make decisions on appeals.

In addition to Block and Reeves, the board includes former Democratic Assemblymen Michael Eng and Michael Allen, who are from Monterey Park and Santa Rosa, respectively, as well as Laura Kent-Monning, an Oakland attorney and Democrat who is the daughter of former state Sen. Bill Monning, who was a Democratic leader in the California Senate.

In 2015, then-Sen. Jeff Stone (R-Murrieta) introduced legislation to set a $12,000 annual salary for 12 state panels, including the Unemployment Insurance Appeals Board.

“We’ve got to put an end to these high-paying commissions that serve no other purpose than to provide a living for termed-out legislators who can’t find a job in the private sector,” Stone said at the time.

Block defended the board this week, saying it is pulling its weight. Between the January and February meetings, the board members decided 472 appellate cases, Block said.

The board, he said, “has maximized its appeal hearing capacity within the limits of current staffing.”

“Board Members, judges and staff understand the dire need for Unemployment Insurance benefits during this pandemic,” he said.