Last week, California reported an increase in coronavirus unemployment claims against independent contractors, workers and the self-employed, and tens of thousands of claims raised renewed concerns about widespread fraud. The state received more than 77,000 additional claims compared to a week earlier, representing more than a quarter of all such claims nationally, according to data released Thursday by the U.S. Department of Labor. The lawsuits fall under a program approved by Congress last year to provide unemployment benefits to people during a pandemic who are not normally entitled to receive them. The State Department for Employment Development has been plagued with unemployment claims since March, when Governor Gavin Newsom imposed the first national home stay order, which closed many businesses. The state has processed more than 1
Last week, California saw an increase in coronavirus unemployment claims for freelancers, workers and the self-employed, and tens of thousands of claims raised renewed concerns about widespread fraud.
The state received more than 77,000 additional requests compared to a week earlier, representing more than a quarter of all such requests at the national level, according to data released Thursday by the U.S. Department of Labor.
The lawsuits fall under a program approved by Congress last year to provide unemployment benefits to people during a pandemic who are not normally eligible to receive them.
The State Department for Employment Development has been plagued with unemployment claims since March, when Governor Gavin Newsum imposed the first national home stay order, which closed many businesses. The state has processed more than 19 million claims and paid more than $ 113 billion in compensation.
About $ 4 million in receivables and payments of $ 43 billion fall into the program for independent contractors. The program has helped many people who are self-employed in time economic exclusions from the virus. But broad eligibility requirements have made it a target for criminals seeking easy pay.
Thursday’s increase was in new lawsuits, not those of people extending or renewing them in Congress.
This alarmed Michael Bernick, former director of the employment development department and lawyer at the company Dwayne Morris.
Most independent performers in California have already had to file new lawsuits in the previous nine months, he said.
“The new (number) claims don’t make sense, except to show the recurrence of fraudulent claims,” Bernik said.
The Employment Development Department told the Associated Press that it “could not speculate” on the reason for the jump, but Governor Gavin Newsum and other officials repeatedly accused the program of being the source of most fraudulent demands.
The state generally recognizes the payment of at least $ 400 million in false claims, including thousands in the names of prisoners, including some of the death sentences. However, fraud claims have dropped significantly since last fall, when the state installed new safeguards, including negotiating with ID.me and Pondera Solutions to better verify the identity of the plaintiffs.
California was overwhelmed with lawsuits in the early days of the pandemic after Newsom imposed home orders in mid-March that closed most businesses. The department managed to resolve the backlog, which reached its peak last year of 1.6 million requests. But the pile has grown again and now stands at more than 800,000 people.
Newsom imposed a new home stay order on much of the state in December following a wave of new coronavirus cases, hospitalizations and deaths. Newsom expanded these orders in many regions this month. But he lifted the order for the counties in and around the state capital.
Republican MP Jim Patterson, a frequent critic of Newsom’s handling of state unemployment claims, said his office had been overwhelmed in recent weeks with calls from voters seeking help in receiving unemployment benefits, an indication that many had lost their jobs again. its because of the delay restrictions on business.
Patterson said he suspected the increase in claims was likely a combination of fraudulent and legitimate claims. But he added: “If (the Employment Development Department) doesn’t know, how do I know?”
“That’s the big problem,” Patterson said. “The history of EDD is that they have not been able to distinguish between legitimate and fraudulent accounts.”
The department’s precautionary measures make it very difficult for people to file fraudulent claims, said El Dorado County Attorney Vern Pearson, president of the California District Attorneys Association and one of many prosecutors investigating unemployment fraud across the country.
Pearson said he believes the jump in lawsuits may be related to the recent jump in COVID-19 cases and the accompanying business restrictions that have hurt the economy.
But no system is reliable, he said.
“Criminals are still trying to defeat the system,” Pearson said. “He can be defeated.”
Blake Hall, founder and CEO of ID.me, told the Los Angeles Times last week that at least 10% of claims filed with the state before the controls were introduced in October may have been fraudulent – which could lead to close $ 10 billion in fraudulent payments.
The state has not said how many fraudulent claims it has paid. State Auditor Elaine Howell is due to release two audits of the department next week.