New Unemployment Claims Suspended as Claims Backlog Grows

California’s Employment Development Department (EDD) announced late Saturday night that the agency would not accept any new unemployment claims until Monday, Oct. 5 while improving its claims system.

Temporarily suspending new benefit submissions is the first step in a system-wide overhaul that is necessary for the state to process an estimated 60,000 unemployment claims each day.

The announcement came following an emergency audit by a “strike team” created by Gov. Gavin Newsom. The strike team found that one-sixth of the daily claims end up in a backlog that is described as “unbounded” in its growth. It is estimated that the backlog will take four months to clear, despite the EDD hiring more than 1,800 people in May to help process claims.

Data from the audit found that an experienced claims processor can manually process just 24 claims each day. The report states that “more than 20,000 claims per day are diverted into manual processing.”

The EDD says that it processed 1.93 million claims in the month of July, distributing over $6.39 billion dollars to Californians. Since then, the federally-funded CARES Act $600 weekly benefit has elapsed, creating additional financial strain on the state and its residents as COVID-19 restrictions continue into their seventh month.

Eligible Californians are receiving an extra $300 per week under the Lost Wages Assistance Program, however the benefits are only guaranteed for three weeks.

More than 217,000 people in Orange County remain unemployed per the Bureau of Labor Statistics. Leisure, hospitality and food workers account for 42.4% of those still unemployed.

California’s unemployment rate dropped from 13.5% in July to 11.4% in August. Orange County’s unemployment rate is slightly lower than the state average, dropping from 12.4% in July to 9.9% in August.