Wait for first California jobless benefits could be ‘much longer’ than 21 days amid coronavirus
An unemployed worker in California will likely find their first benefit payment will take “much longer” than the typical 21 days, according to a report from the state Legislative Analyst’s Office report released Monday.
Under normal economic conditions, the state Employment Development Department “typically issues about 80 percent of first benefit payments within 21 days of receiving a worker’s application,” the analysis by the nonpartisan agency found.
But, with claims surging as the coronavirus outbreak sends the economy into a tailspin, “given the extraordinary number of applications received recently, as well as the expectation that claims will continue to increase over the coming weeks, the Legislature should anticipate that first benefit payments will take much longer than 21 days.”
EDD saw a huge surge in claims last week. Gov. Gavin Newsom said claims jumped from an average of a few thousand daily to tens of thousands.
The agency is rapidly seeking state workers with experience in the UI program, and is redirecting staff to help.
The analysis noted that during the 2007-09 recession, the last major economic downturn, there were similar delays, and the state immediately issued benefits based only on information in applications.
Normally, EDD takes several steps before issuing benefits — such as contacting the employee’s former employer.
“Based on our understanding, this directive significantly reduced benefit delays. At the same time, however, it created new administrative challenges for EDD and some confusion for employers,” Monday’s analysis said.
There was encouraging news, though.
Most employees are eligible to get benefits, and the stimulus package signed by President Donald Trump last week makes it easier to cut through red tape.
It also provides about $120 million in additional unemployment insurance funding to the state, and extends the amount of time someone can collect benefits from 26 weeks to 39 if unemployment jumps sharply. The extra 13 weeks would be federally funded.
Another help for state financing: The state’s unemployment insurance fund often becomes insolvent during downturns. To cover the costs, Washington lends money to the state, and the state has to pay interest.
The stimulus bill suspends the accrual of interest through the end of the year.
“Given the magnitude of initial unemployment claims received so far, the state UI Trust Fund likely will become insolvent in the coming months, meaning this provision of the federal relief act could reduce state general fund costs, at least to some degree, related to repaying interest on federal UI loans,” the Monday analysis said.
Last year, the average unemployment benefit in California was $330 a week for 17 weeks.
This story was originally published March 23, 2020 at 2:12 PM.
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