A bill to mandate cross checking prisoner records with Employment Development Department (EDD) claims unanimously passed the Senate 38 to 0 on May 28.
Senate Bill 39 is another key step toward ensuring the California State Auditor recommendations to fix the unemployment system are implemented, the bill’s sponsor, Sen. Shannon Grove, R-Bakersfield, told the Northern California Record.
“The hope is to take the state Auditor’s recommendations and protect taxpayers’ funds,” Grove said.
The Los Angeles Times estimates that prisoner fraud alone cost taxpayers $2 billion.
“That’s $2 billion eliminated from the UI [Unemployment Insurance] Trust Fund, which is 100 percent employer-funded,” Grove said. “And we hope this bill – requiring cross matching prisoner records with EDD claims – that it would prevent that fraud from happening.”
Eliminating fraud needs to be a priority as businesses reopen.
“Businesses, who have been shut and opened again and again this past year, wouldn’t have to make up this difference if the fraud didn’t exist,” Grove said.
Kern County District Attorney Cynthia Zimmer partnered with Grove on the legislation. Zimmer noted the prison fraud has been particularly devastating in Kern County, which has five prisons, and has had to divert resources from investigating other crimes to the EDD issues.
SB 39, which contains an urgency clause, is now before the Assembly; if passed there and signed by Gov. Gavin Newsom, it would take effect immediately.
According to a news release from Grove’s office, “Between March and August 2020, more than 35,000 Pandemic Unemployment Assistance claims were filed on behalf of inmates and more than half of those claims were paid, despite inmates being ineligible to receive the benefits under current law.”
SB 39 is one of several bills addressing EDD reform passed by the Senate last week.
The EDD is overseen by the state Department of Labor, whose Secretary, Julie Su, has been nominated for the number two spot at the U.S. Department of Labor.
The former head of the EDD, Sharon Hilliard, retired in December and was replaced by Rita Saenz.
The pandemic has highlighted the substantial amount of fraud at the EDD.
“It’s just never been addressed,” Grove said. “I would hope that the governor signs this series of bills, to implement the Auditor’s recommendations, so we move forward and eliminate some of the fraud out of the system.”