Settlement with California’s Employment Development Department Requires Immediate Payments to Hundreds of Thousands of Unemployed Californians

EDD agrees to sweeping changes in how it handles continuing unemployment insurance claims

July 23, 2021 – In a groundbreaking settlement negotiated by Altshuler Berzon LLP on behalf of the Center for Workers’ Rights, California’s Employment Development Department has agreed to make significant changes in how it processes unemployment insurance claims and to immediately pay millions of dollars in conditional UI benefits to unemployed Californians, many of whom have been waiting months to receive those benefits. The affected claimants were previously approved to receive unemployment benefits, but had their payments suspended without explanation while EDD has been working through its huge backlog of eligibility determinations.

EDD’s announcement follows months of negotiations, which culminated in the filing of a class action complaint for injunctive relief and a settlement that now awaits court approval – although EDD agreed to begin implementation immediately, without waiting for further court order. The complaint alleges that EDD’s prolonged delays in providing payment to unemployment insurance claimants in continuing claims status violate the Social Security Act, which requires state unemployment insurance programs to maintain “methods of administration … reasonably calculated to insure full payment of unemployment compensation when due.” The settlement requires EDD to provide conditional payment to unemployment insurance claimants in continuing claims status when EDD has failed to make a determination regarding the claimant’s eligibility by the end of the week following the week that EDD first became aware of the eligibility issue.  The settlement also requires EDD to notify those claimants that the payments they are receiving are conditional pending the result of EDD’s investigation and to inform those claimants of the basis for EDD’s eligibility concerns and how the claimant can respond to those concerns.  More information about the agreement is available here and here. The complaint, entitled Center for Workers’ Rights v. EDD et al., is pending in Alameda County Superior Court and can be read here.

Altshuler Berzon LLP attorneys Michael Rubin and Amanda Lynch represent the Center for Workers’ Rights in this case, assisted by summer associate Nina Oishi. The complaint, entitled Center for Workers’ Rights v. EDD et al., is pending in Alameda County Superior Court.