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California EDD hits bottom, keeps digging with Audits and dodging Deloitte violations

Written By | Jun 18, 2020
California Employment Development Department, California, EDD

LOS ANGELES: The California Employment Development Department (EDD) hit bottom some time ago, yet, they keep on digging. Last week they threw up this tweet of what I assume they thought was “fresh” information.

DeLoitte, California, EDD

This was five days after the San Francisco Chronicle profiled the people suffering from their abundant lack of response to California’s UI system breakdown. The article also included lots of excuse-making by California Secretary of Labor Julie Su. Between this, and the subsequent tweet, it proves CA_EDD is more interested in covering their collective backsides than it is in offering relevant solutions to the millions of unemployed desperately waiting for benefits. It’s the governmental equivalent of the dog ate my homework:

“Although the state has processed almost 5.7 million claims and awarded $22.2 billion in unemployment benefits since mid-March, there are at least thousands of Californians like Blum and Smith hung up in the EDD’s antiquated, overloaded system.”

Sadly, the SF Chronicle article does not even scratch the surface of the mismanagement and mishandling embedded in every aspect of the CA_EDD’s response during COVID-19. CA_EDD’s Twitter page was full of responses from a few of those millions of Californians who are waiting in vain:

DeLoitte, California, EDD

DeLoitte, California, EDDTenTenLo won the Internet for the day:

Much of this mess is CA_EDD’s focus on its own agenda, rather than the individuals and businesses who paid their taxes, did the right thing, and expected the system to work when they could not.

Judah drove for both Uber and Lyft, and applied for her benefits in March. The CA_EDD messed up her claim, and she has had the same difficulty as others in getting answers from them on when they plan to fix it and apply the retroactive amount.

CA_EDD is obsessed with their task of enforcing AB5 and the Uber and Lyft driver misclassifications. It seems they want to force these corporations to pay out more than they want people’s children not to starve.

Is California Employment Development Dept. breaking AB5 law with Deloitte?

Judah shared two calls she received from CA_EDD that drive home this point:

In Judah’s first 15 minute conversation on June 8 with an agent named “Them”, the rank incompetence of the agent in not handling her job was apparent. It was like the agent was reading off a script and having to check her paper for every line.

Them couldn’t keep straight which ride service company Judah needed to discuss, Them asked similar close-ended questions that Judah had already replied to, and between each step, Them would interject with peppy phrases like, “We’re moving along nicely here”.

Them” started out saying she would ask simple “Yes” or “No” questions, but when she did not receive the answer she wanted, she would ask additional queries, which rightly received push back from Judah. Them tried to change her tactics, but fumbled because she had no idea about the nature of the rideshare apps that Judah used and how the process works.

This did not engender confidence in Judah, who quickly surmised that when dealing with Uber and Lyft drivers, CA_EDD’s goal was to get evidence toward misclassification—NOT to actually process their claims and get them their money as quickly as possible.

When Judah asked how she was to report “Them” for her lack of competency when all she had was her first name,

“Them” rattled on about seeing if “another auditor” could do her case.

JUDAH: “This entire process has been nothing but a nightmare, sponsored by EDD. I still have not received my unemployment, when I applied back in March. Then you want to call me and ask me questions for an audit, and then ask misleading questions and make assumptions that you have no business making.”
“Them”: “I’m not doing an audit.”
JUDAH: “You just said you’d have another auditor call me!”

Oops! “Them” said the quiet part out loud.

California’s AB5 gig economy law puts Nurses at risk during COVID-19

“Them” was flustered, said she would have “her manager” call back and assist Judah, and hung up.

On June 9, Judah received her second call from, as much as this writer could make out from the recording, a man named “Ezebyeh Kene.” Judah expressed her dismay at the lack of professionalism exhibited by the last agent.

JUDAH: “I sent a recording of the call to my senator, and his staffer said she was incompetent.”

There was a very long pause on this recording, then Ezebyeh let out a big sigh.

EZEBYEH:  “Yeah… but in the meantime what can we do as far as that process… because I don’t know if the staffer has worked for EDD or has done these type of investigations…”

Judah laid out her case of not receiving the benefits she had applied for, and hit her frustrations home: “The problem is the system and your people.”

Ezebyeh then devolved into giving Judah a “pep talk” about how we have to “give everybody an opportunity to be great—that’s my motto.”

I. Kid. You. Not.

JUDAH: “I just don’t understand what you guys are calling about?”
EZEBYEH: We are with EDD but we’re with the tax branch. So what we do is, we normally, we deal with issues with employers, and different classification issues, and so because of that, because we look at whether a person is an employee or an independent contractor, unemployment insurance, that branch reached out to us to help assist them in doing the claims and any information they see fit in vetting…”

Is California Employment Development Dept. breaking AB5 law with Deloitte?

Bingo. Sometimes if you let them talk long enough, they reveal the truth.

No one seems to know whether the 21 million set aside to enforce AB5 is being used to contract these two poster children for the Peter Principle, but like much of what the CA_EDD has done, it is an epic waste of resources grilling Uber and Lyft drivers who simply want the payments (pandemic or otherwise) owed them.

Wasting money and resources seems to be what CA_EDD does best, while people like Gregory in the above tweet have no idea how they are going to feed and house their children.

This gross negligence in no way excuses that CA_EDD is itself in violation of the AB5 law. The CA EDD did contract with Deloitte, a staffing corporation that hires nothing but independent contractors to:

“provide staff and service augmentation to EDD’s UI TCC operation”.

This language is from the actual Deloitte Consulting LLP claims EDD M53530-5 contract approved in April by Marlon Paulo of the California Department of Technology Statewide Technology Procurement.

KCRA and other media outlets (including this writer) exposed this contract with Deloitte in late May.

As if on cue, CA_EDD started tweeting about a “mass hiring effort” in order to assist with the claims overload.

Way to gaslight your way out of having to answer why freelancers and independent contractors cannot violate AB5, but a California government agency can.

Michael Alfera of The People v. AB5 advocacy group wrote a letter to Attorney General Xavier Becerra asking for an independent investigation into this contract. Michael also engaged CA Labor Secretary Julie Su and other CA_EDD heads on Twitter to get answers on why millions of independent contractors cannot work without violating AB5, but the State of California can hire independent contractors from outside the state. It’s truly equivalent to a slap in the face to people who are already on life support from the double blow from AB5 and COVID-19.

This writer read the entire contract and had some questions of my own. I decided to write to Sandy Mendes, CA_EDD’s head of Business Operations Planning and Support Division, and Karen Sanders, the named Contract Manager.

I first outlined the case-independent contractors raised with Labor Secy Su and Assemblywoman Lorena Gonzalez regarding this contract. Using specific language from the contract, I posited the three questions outlined in the attached letter.

The questions were:

Question 1:  How is Contract M53530-5 not in violation of the goals of AB5?
Question 2: How is Contract M53530-5 not in violation of the Business to Business terms in AB5?
Question 3: Does CA_EDD plan to use Federal pandemic relief afforded to the states to fund this $11 mil. Contract?

This writer has no idea how Mr. Alfera fared with his correspondence, but I did not receive any response to my questions. Zero. Zip. Nada.

Most who tweet at CA_EDD or Julie Su on Twitter also get radio silence. And you know things are a disorganized mess when Asm. Lorena Gonzalez turns on the “Mother Teresa of Policy” mode to continue to try and support using the CA_EDD to defend her indefensible law.

DeLoitte, California, EDDAny defense, answers, or required accountability is much like a fart in the wind: it stinks to high heaven, then wafts away like it never occurred.

CA_EDD is probably blaming that on the dog, too.


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Jennifer Oliver OConnell

Jennifer Oliver OConnell offers witty, insightful, and direct opinion, analysis and musings on local and national politics and popular culture, with occasional detours into reinvention, food, and Yoga. Jennifer also teaches Yoga, and coaches clients on careers and reinvention. You can keep up with what's in Jennifer's orbit through her As the Girl Turns website.