California will not accept any new unemployment claims for the next two weeks after its systems were overwhelmed by a flood of cases during the pandemic.
The two-week ‘pause’ will allow the Employment Development Department to try and clear a backlog of 600,000 claims that has built up in the wake of lockdown.
It comes after a strike team set up by Governor Gavin Newsom found the backlog is still growing by around 10,000 cases per day, despite employment rates improving in recent months.
California will not accept any new unemployment claims for two week as it tries to clear a backlog of 600,000 cases that built up during the pandemic shutdown (file)
The ‘pause’ will also allow IT staff to update their systems meaning that new claims can be processed faster in the future, which will stop the problem happening again, a spokesman said. The new systems will also include enhanced fraud prevention.
California Labour Secretary Julie Su added: ‘The work of the strike team marks a key turning point to re-focus and re-center the provision of unemployment insurance for the good of all Californians.’
More than 2.1million people were registered as unemployed in California in August, the most recent month for which data was available, the FDD said.
The figure is down slightly on previous months, but still 1.3million more than the same month last year.
The state’s economy was hammered by coronavirus shutdowns in April and May that saw the unemployment rate soar to 16.4 per cent – higher than it was the depths of the 2010 Great Recession, when it hit 12.3 per cent.
The rate now stands at 11.4 per cent, the first month since April that it has been below the 2010 benchmark.
The shutdown comes after a ‘strike team’ ordered into the department by Governor Gavin Newsom (file) found the backlog is still growing at a rate of 10,000 cases per day
But even as the number of new claims falls, staff at the FDD have been struggling to keep up with their new workload.
A report published last week by Newsom’s strike team found that the department is working over-capacity, with no realistic hope of catching up with a backlog of cases that have already taken more than 21 days to process.
The report recommended using new IT systems to automate as many claims as possible, freeing up staff to look at more complex cases that are causing delays.
The shutdown will only affect people filing an unemployment insurance case for the first time.
They will be redirected to a page where they can leave their details so they can be contacted once the system is back up and running again.
Those who have already applied will not have to do so again, and can still manage their claim online during the ‘pause’.
California’s unemployment rate soared to more than 16 per cent at the height of the pandemic shutdown, as more than 2million were left without work (pictured, a gym in Culver City)
Nationally, the unemployment rate peaked at more than 15 per cent during the coronavirus crisis, with a total of 26.4 million unemployment claims filed.
While national figures have also been improving in recent months – with the rate falling below 10 per cent in August – economists have warned that the pace of recovery is slowing as federal stimulus packages run dry.
America has been hit harder by coronavirus than any other country on earth, suffering 6.8million infections, though India – with 5.4million – has the world’s fastest-growing outbreak and is due to overtake it in the coming weeks.
The US has also suffered almost 200,000 deaths from the virus which is by far the highest global total. The next-highest is Brazil, which has recorded 136,000.