Assemblymember Wendy Carrillo’s EDD Recession Plan Bill, AB 2129, Signed into Law by Governor Newsom

For immediate release:
  • Francisco Quintana
  • Communications Director
  • (916) 319-2051

 

AD51

 

SACRAMENTO, CA – Governor Gavin Newsom signed AB 2129 (Carrillo) into law to ensure the Employment Development Department (EDD) is on task with implementing a recession plan that would minimize barriers to obtain benefits during economic downturns.

“The COVID-19 pandemic and its accompanying economic downturn are not things of the past. The pandemic exposed the EDD’s lack of preparation for such circumstances, leaving Californians facing numerous challenges as a result of backlogs, the digital divide, limited access to EDD in languages other than English, and fraud prevention,” said Assemblymember Carrillo. “Our state budget has allocated historic investments to address these problems; so, the signing of this bill is a huge victory for transparency. AB 2129 will shed light on the Department’s work to implement critical reforms that will minimize barriers for Californians to obtain benefits.”

California has the nation’s largest public benefits system, with over 21 million people filing 63 million claims for unemployment insurance, disability insurance, and paid family leave claims over the past decade. The COVID-19 pandemic tested the benefits system and pushed its capabilities to the limit, exposing the need to deliver better systems and modernize operations. California’s unemployment rate shot up from its near-record low of 4.3 percent in February 2020 to 16 percent in April 2020, shattering the previous record high of 12.6 percent at the height of the Great Recession in 2010. EDD delivered unprecedented levels of benefits to Californians during this pandemic, paying over $180 billion in unemployment insurance.

In September 2020, the Joint Legislative Audit Committee directed the State Auditor to conduct an emergency audit of the EDD’s response to the COVID-19 pandemic.  Two State Auditor reports were released in January 2021, detailing how EDD was unprepared to assist Californians left unemployed, because of COVID-19 shutdowns. In addition, the State Auditor found that EDD failed to take fast enough action at the beginning of the pandemic to bolster its UI fraud detection efforts. Both audit findings were discussed in a Budget Sub 4 hearing on State Administration with a focus on accountability for EDD and solutions to move forward.

“Over the last two years, EDD has implemented strategic recommendations from the Strike Team and California State Auditor and is continuing to improve systems and operations across the board.” said EDD Director Nancy Farias. “Through our partnership with the legislature and diverse communities across California, EDD will continue serving Californians in need.” 

In 2021, SB 390 (Laird) was enacted requiring the EDD to develop a recession plan every two years, specifically outlining its predetermined strategy to respond to economic downturns. AB 2129 adds an additional element to the EDD’s recession plan by requiring a summary of actions taken to implement recommendations contained in the recession plan previously submitted to the Legislature.

Assemblymember Wendy Carrillo was elected as the representative of the 51st Assembly District in December of 2017. She is currently the Chair of Budget Subcommittee No. 4 on State Administration, and a member of the Assembly Committees on Appropriations; Budget; Health; Housing and Community Development; and Utilities and Energy. Carrillo represents the people of East Los Angeles, Northeast Los Angeles, and the neighborhoods of El Sereno, Echo Park, Lincoln Heights, Chinatown and parts of Silver Lake.

 

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