After Harder's Months Long Push, Labor Department Begins Sending New Resources to Reform EDD

Press Release

After a months long push by Representative Josh Harder (CA-10), the Department of Labor (DOL) recently announced it has begun distributing the $2 billion it was allotted in March to help unemployment agencies like EDD implement desperately needed reforms. Rep. Harder voted to send $2 billion to the DOL through the American Rescue Plan to help states prevent unemployment fraud, promote equitable access, and ensure timely payment of benefits. Despite the urgent need for reform at broken unemployment agencies like EDD, the Labor Department has been unacceptably slow in distributing these funds.

"Every day someone in my community has to choose between keeping their lights on and buying their family groceries because of the failures at EDD. If the Labor Department was a week late in delivering the funds necessary to fix EDD that would have been bad enough, but the fact that they were five months late is plain unacceptable," said Rep. Harder. "Funds are finally getting out to ensure folks get help on time and law enforcement can fight the criminals defrauding our neighbors, but I'll be on this issue until EDD proves it can be trusted to protect taxpayer money. This is a step in the right direction, but we've got a long walk ahead of us."

In April, Rep. Harder spoke directly to Labor Secretary Walsh on the issues plaguing EDD. He called EDD a "total and complete mess" and demanded the Secretary put forward both a timeline and accountability plan for the federal funds going to fix it. In June, Rep. Harder doubled down on his demands of the Labor Department in reaction to new reporting on the continued failures of EDD.

See below and online here for the plan laid out by the Department of Labor to spend the $2 billion:

The Department of Labor has begun to spend this funding by carrying out work on four tracks to address systemic shortcomings in access, based on proven strategies:

Direct assistance to the states through "Tiger Teams": States are facing acute -- and varied -- challenges that need to be better identified and addressed around the process of preventing and detecting fraud, promoting equitable access, eliminating backlogs and ensuring timely payment of benefits. The department is addressing these challenges by sending experts directly to the states, to work hand in hand with states to identify solutions. Despite ongoing efforts to add staff, deploy innovations and address backlogs -- many states' backlogs are persisting. With this funding the department will be able to support states more comprehensively to address these issues. Deploying these teams and resources will help states zero in on what's working and should be shared and what's not, and should be addressed. The department has begun deploying teams of experts, or "Tiger Teams" into an initial six states on a voluntary basis -- Colorado, Washington State, Kansas, Wisconsin, Virginia and Nevada -- to help identify process improvements that can speed benefit delivery, address equity, and fight fraud. The department will expand the Tiger Team supports to additional states throughout the year.

Tools to states to help address immediate fraud concerns by facilitating more effective ID verification: Identify verification is a critical tool in paying unemployment benefits to eligible individuals. Yet too few states have the resources, expertise, and capacity needed to address effectively the wide-ranging attacks that the UI system has experienced from organized criminal enterprises. The nature of fraudulent activity in UI will continue to be highly dynamic and states will require additional support and continuous monitoring for evolving threats. The department plans to take a more active role in helping states improve their identification verification processes. This will cut down on fraud, which is contributing to large backlogs and the hijacking by fraudsters of benefits that workers need, instead allowing states to focus resources on serving legitimate claimants. To that end, the department recently made identification verification services available to states to purchase.

Developing IT solutions to modernize antiquated state technology by centrally developing open, modular technology solutions that can be adopted by states as needed: The pandemic has only underscored states' desperate need for technological support and improvements. Many state systems are operating on outdated technology, which made it difficult for them to respond rapidly to changes in law and economic conditions. This problem will be addressed by centrally developing open, modular technology solutions that states may adopt as part of ongoing modernization and improvement efforts. Shared IT solutions will be designed to integrate with state systems and will focus on the needs that are shared across states, while supporting states to implement and continue operating state specific elements. The department hopes to provide software to support end-to-end administration of UI, including benefit delivery, employer tools and appeals.

Providing direct grants to states to promote timeliness and equity and fight fraud: States lack the resources they need to manage the current volume of claims quickly, accurately and equitably. As a result, far too many workers, underrepresented populations, those with limited English proficiency, or low-income claimants face barriers in accessing unemployment insurance. To address that challenge, the department plans to make $700 million in grants to states available to promote equity and fight fraud. These grants will be designed to help states improve their UI systems to ensure benefits go to workers who need them. These funds are an important down payment; the longstanding problems this pandemic further exposed can be addressed only through comprehensive UI reform. Unemployment Insurance is a lifeline for millions of workers, providing critical support to help them through difficult times. The Department of Labor is committed to strengthening the Unemployment Insurance system to ensure that it works for all workers, and to ensuring that unemployed workers have access to quality reemployment services that can help workers transition back into the labor market and into quality jobs.

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