Legislation that would require the California Employment Development Department (EDD) to implement specific fraud prevention measures contains an urgency clause that would make it effective immediately.
Among the changes, as noted in the Senate Floor Analyses, “Replacing an individual’s social security with a unique modifier provides one more safeguard against harmful fraud within EDD’s purview.”
The goal of SB 58, sponsored by California Senate Republican Leader Scott Wilk, R-Santa Clarita, is to implement fundamental system reform and prevent fraud before it happens.
“It was shocking to learn that EDD still included full social security numbers on its correspondence, despite warnings by the State’s Auditor in 2019 that this practice increases the risk of fraud,” Wilk told the Northern California Record by email. “Clearly the Auditor was right because thousands of unemployed Californians are now victims of fraud stemming solely from EDD’s mismanagement.”
Earlier this month, the Senate unanimously passed the bill in a 37-0 vote; on May 20, it was referred to the Assembly Privacy and Consumer Protection Committee.
Recent reports estimate the EDD has paid roughly $30 billion in fraudulent claims.
As noted in a bill support statement, submitted to the Senate by the California Landscape Contractors Association, “CLCA believes that it is long overdue that the EDD stop using employee and employer social security and tax identification numbers in its communications to Californians regarding benefit programs. Identity theft is a serious problem and EDD’s current practices make millions vulnerable unnecessarily.”
State and federal prosecutors also have recently announced progress in the criminal EDD fraud investigations.
“Adding insult to injury, while people waited months for their UI, prisoners were fraudulently raking in millions of dollars without issue,” Wilk said. “This bill will force the agency to take practical and common sense steps to keep our social security numbers safe from fraudsters in the future.”
SB 58 previously passed the Senate Labor Committee and the Senate Judiciary Committee with unanimous support.