EDD's Crisis Response...

Or Lack Thereof

Note - this is a slightly truncated but still updated version of the previous “Omni-Shambles” item. I would like to thank the California Policy Center - https://californiapolicycenter.org/ and RealClear Policy - https://www.realclearpolicy.com/ - for running this version.

On January 1, 2021, 1.4 million Californians woke up with something much worse than a hangover.

They found a surprise email from the state’s Employment Development Department telling them that their unemployment claim was flagged for suspected fraudulent activity and all payments were suspended until, well, whenever-ish.

On a good day, the unemployment system is an outdated creaky mess; add in the massive unemployment jump due to the pandemic and the equally massive amount of federal dollars flowing through the system in COVID relief money and something bad was most assuredly going to happen.  And EDD somehow made it worse.

California has a major unemployment fraud problem, with estimates ranging upwards of $30 BILLION stolen by a whole slew of people - foreign nationals, gang members, former EDD employees, state prisoners, and garden variety fraudsters. 

The litany of EDD missteps on every front is far too long to go into every specific case here - suffice to say that the term “omni-shambles” pretty much covers it.

So here are some of the lessons learned from EDD’s worst pandemic moments:

1.       When facing an impending disaster, don’t just hit the send button and pray. 

In response to the pandemic and in conjunction with the federal support dollars, the EDD created a new category of claimants – gig workers, the self-employed, business owners – who would be allowed to access benefits. 

As part of this effort, the EDD put in place identity and employment status verification requirements that were, well, lax at best.  Let’s rephrase that – they were nonexistent to the point that one could drive a $30 billion bus through.  And people did.

EDD’s non-response to the issue?  It did not bother to hire an identification verification vendor for months – during the most rampant period of fraud - claiming a lack of funds. 

The lesson here? Understand that there are people who will take advantage of you in the world and do everything you can to make sure that doesn’t happen while continuing to serve their customers or to assist those rightfully entitled people in need (in other words, even if you’re evil at least be competent).

2.       Don’t make the people you are paid to serve feel stupid and hopeless

Throughout this debacle, EDD has consistently managed to somehow make things worse at every step of the way.  A claimant, after a 25 hour (yes, 25 hours) wait on hold to verify their identity (see above), then found out that well, yes, the claim is active and we will tell you when you might be able to access your funds later which should be in about six weeks. Probably. (Speaking of being on-hold, EDD’s call center is so inept that unemployment claimants are literally paying to use computer apps to call the EDD on their behalf just so they have a better chance of at least being placed hold.)

Additionally, the EDD very recently informed well over one million people that they may have to file an entirely new claim because their “claim year” had, or was about to, expire.  Typically unemployment claims run for no more than a year, but with the automatic extensions granted last year there was some confusion as to how that process was going to handled.  Again, the agency botched the issue-badly.

At the beginning of the process – over the course of days - they informed the public that most people would have to re-apply, and then they said some people, finally settling on certain people.  Of course, each claimant was – for some time - left on their own to determine if they needed to file a new claim or not, despite the clear fact that the department already knows what type of claim each individual has and has each individual’s email address.

Finally, the agency’s relationship with social media and other internet communication tools has not only been rocky but at times heartbreaking.

First, there is the true story of the person who posted a video that, in rap format, explained exactly how to defraud the agency.  While he was eventually arrested (for felony stupid, one would assume) the video was up for weeks.

Being careful with what your organization posts is equally, if not more, important.  The EDD, astonishingly, posted on their Twitter feed a request stating that “We believe online conversations should remain respectful & courteous to everyone.”  Suffice to say the reaction was rather less than respectful and courteous, with the comments ranging from angry to very angry to achingly hopeless.

Here is an omni-shambles agency that has managed to pay out billions to criminals while simultaneously driving deserving taxpayers into homelessness deciding it would be a good idea to demand that those same taxpayers be nice to them.

PR departments are there to spin, lipstick the pig, etc. but how they conduct themselves is a fairly accurate window into the culture, the internal worldview, of the entire organization and what they think about their customers/clients/etc.  This was beyond mere incompetence - it clearly shows that EDD's agency mindset is one of depraved indifference.

3.       If you set a deadline for an action on your part and announce it publicly, stick to it.

On December 31, EDD sent a message to 1.4 million people saying their account had been suspended for possible fraudulent activity.  The message said they would be given more information on January 6.  Over the course of the week, the situation got noticed by the media and state legislators as tens of thousands of panicked people called everyone and anyone they could think of to get more information.

EDD’s response?  To send out another message on January 8, informing people they were coming up with a plan to remedy the situation that would involve verifying identities and such.  It did not say what that plan was or when it would be put into action. 

The completion of the lumbering identity verification/reestablishment of benefits process moved forward, but hundreds of thousands of legitimate claimants did not see a restoration of payments for many weeks and some are still left out in the cold.

The lesson here?  Do not set deadlines you cannot meet; do not plan to release information you don’t have; do not promise solutions when you have not strictly defined the problem; and communicate accurate information directly with anyone impacted, especially considering you already have their contact information.

4.       Do not aggravate your (real and/or potential) allies and supporters or your business partners and vendors.

While it is unclear exactly when the EDD decided to essentially lay off 1.4 million people who had already been laid off, it is clear that they told no one what they were planning. 

Members of the state legislature – the EDD’s bosses – were not informed of the plan and only learned of it when thousands of furious and vulnerable constituents started calling them.  In response to the legislators’ ire, the EDD pretty much only said to tell people to check the website or call the toll-free line, a line which was answering about 4 percent - at best - of its calls on a daily basis.

Little, if any, information about the scope of the problem, the tech issues related, the reason behind the suspensions, what the plan was to fix it, and the timing of the fix was offered.  The legislators were not amused.

The lesson here?  Do not hide information from people you will need to defend your position because if you do your erstwhile allies will be out on the street desperately looking for a bus to throw you under (or in front of). 

5.       The EDD proves there will always be organizations in need of communications help

For communications and public relations specialists, what is the lesson here?  First, learn everything you can about your client’s systems and actions and weaknesses so that you stop them from doing incomprehensibly incompetent stuff over and over again.  While the spiral of stupidity may lead to more billable hours, stopping such silliness does make the job much easier.

If you feel you need to hire a crisis communications expert, you probably do.  But remember that they are the professionals in the room now and need to be treated as such.  You dug the hole – it is their job to lift you out of it and fill it in so be honest with them and – most importantly if your organization is at fault – with yourself. 

For people in crisis management, first be as understanding as possible.  Second, be absolutely honest – to a point.  For example, when it becomes clear that your client’s company is about to go bankrupt you do not have to mention to her that those shoes really don’t go with that dress.  Third, be decisive.   Remember that you are the expert in the situation and make sure the client understands that as well. 

Clearly, the EDD has a communications – among so many others – problem and what exactly the communications staff – and, by extension, the entire bureaucracy – has been thinking over the past year is quite the puzzle.  Unless the most obvious answer is the correct one – that they haven’t been thinking for years.