EDD officials reported that the agency is now better equipped for future recessions due to technological and process improvements. During a Tuesday hearing, California lawmakers seemed to largely agree.
“We’re in a lot better position than we were a couple of years ago,” Assemblymember Chris Ward, D-San Diego, said after questioning EDD staff during a budget subcommittee hearing on government operations.
The agency’s readiness has been improved by the adoption of online processes and a more extensive call center system, a report from the nonpartisan Legislative Analyst’s Office found.
EDD — which distributes $22 billion annually to roughly 2 million Californians through its unemployment insurance, disability insurance and paid family leave programs — is less likely to experience bottlenecks that resulted in significant delays during past economic downturns such as the Great Recession of 2008, legislative analysts reported.
Despite these improvements, risks remain
The LAO warned that the agency still relies on its legacy database system, which could comprise programs in a future recession when demand for unemployment insurance surges again.
Additionally, the federal and state government often act quickly to address economic downturns, and those sudden changes can cause changes for EDD when staff need to be redirected.
The agency has been making significant technological improvements to its process for over two decades. It recently began the most complex and costly part of EDDNext — a multi-faceted upgrade to the agency’s processes — that will replace the legacy database mainframe with an integrated claims management system.
California has so far appropriated $931 million to date on technology at EDD, including $146 million the Newsom administration’s 2026-27 budget.
Ward raised concerns about the amount of money the state has spent in the past decades and whether the technology will need to be replaced soon after its finished.
Ajit Girn, EDD’s deputy director of information technology, said investments in the system were necessary so the state doesn’t fall behind. He noted that EDD is being compared to private companies like Amazon when it comes to customer service.
“EDD has to do something, otherwise we’ll always be playing catch-up,” Girn said.
Agency officials said EDD was better positioned to address fraud after additional security measures had been put in place.
During the pandemic, unemployment benefits funded through federal and state dollars were the target of enormous amounts of fraud.
Unemployment programs funded with state dollars were more resilient to fraud because the department can easily verify with employers that workers had been laid off and thus were eligible for unemployment insurance. The temporary federal unemployment benefits did not have the same verification methods, which the LAO report said contributed to a higher rate of fraud in those programs.
Some requests are still delayed
One criticism of those requesting unemployment, disability or paid family leave benefits in the past is that Californians seeking benefits have to wait weeks before getting a response from EDD representatives.
During Tuesday’s hearing, Assemblymember Jessica Caloza, D-Los Angeles, said there has been a recent uptick in EDD claims in her district. She said that some of those constituents have contacted her office after not hearing back from the state agency for several weeks.
“One of my concerns …is that when our office reaches out to you, you respond quickly,” Caloza said. But when a member of the public reaches out, that’s when there are three to four week delays, she said. Caloza said her team has helped retrieve over half a million dollars from EDD.
Cases should be resolved within two weeks of reaching out to EDD, staff said in response to the assemblymember’s concerns.
©2026 The Sacramento Bee. Visit sacbee.com. Distributed by Tribune Content Agency, LLC.
