(Image via iStock, CalMatters)

From dayslong waits on hold to months of missing payments, California’s Employment Development Department and its private contractors have come under fire for a wide range of problems while paying out $122 billion in unemployment benefits since last March. 

At the center of the mess is a panic over how to handle up to $31 billion in suspected unemployment fraud, which has cut off benefits to legitimate unemployment claimants, jeopardized taxpayer funds and fueled stark law enforcement warnings about organized crime.

“There is no sugarcoating the reality,” said California Labor Secretary Julie Su, President Joe Biden’s nominee for deputy secretary of the U.S. Department of Labor, during a January press conference. “California has not had sufficient security measures in place to prevent this level of fraud, and criminals took advantage of the situation.”

But what, exactly, went wrong? And what does all the talk about fraud have to do with ordinary people stuck waiting for unemployment money? Most importantly, what are the prospects for getting workers help as the pandemic drags on? Here’s a guide to what happened and what might come next for the state’s unemployment program.


CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.