No new unemployment claims will be processed for the next two weeks as California's Employment Development Department works to combat fraud and a mountain of backlogged claims during the COVID-19 pandemic. That recommendation is part of a report on the struggling EDD that was released late last Saturday night, and the decision is likely putting many business owners and their employees at greater financial risk given Governor Gavin Newsom's insistence on keeping the state's economy mostly shutdown to prevent further spread of the virus.
Governor Gavin Newsom on Monday defended the decision to temporarily halt the EDD's enrollment of new claims for two weeks. Newsom says it would ultimately allow the state to process benefits faster as it struggles with a massive backlog. The reset involves adding anti-fraud technology and an automated process for new applications. However, nearly two-million Californians are waiting for their unemployment claims to be processed, and more claims could be coming given the Governor's apparent lack of willingness to reopen the state's economy during the pandemic.
The Democratic governor has described the latest rules for determining when certain businesses may reopen as, "simple, also slow." Counties are placed in his four-tiered, color-coded system based on the number of virus cases and infection rates. Specified businesses are only allowed begin the process of reopening as their county moves into the less restrictive tiers.
The California Restaurant Association and their members, for example, are understandably concerned about these recent developments.
"Restaurants cannot sustain themselves or their employees when they operate with strict capacity limits, which means the state should long ago have crafted a comprehensive aid package to help these small businesses hibernate," said CRA President and CEO, Jot Condie. "Our members are like most Californians, now wondering not just how to sustain a job or a business, but how to make the mortgage payment on their homes."
State health officials say California's death count from COVID-19 has now exceeded 15,000, the fourth highest in the country. At the same time the state has seen hospitalizations related to the virus and the positivity rate-- the percentage of positive tests out of all tests conducted-- continue to fall since a spike that started after Memorial Day weekend prompted statewide shutdowns of businesses.
Counties in the purple tier, which the most restrictive category, are only allowed to have outdoor dining at restaurants. Counties in the less restrictive red, orange, and yellow tiers may serve people indoors at reduced capacity.
"We don't put a green (tier) because we don't believe that there's a green light that says go back to the way things were or back to a pre-pandemic mindset," Newsom said at the time he introduced the system.
There are signs that the restaurant industry may be on the verge of a rebellion.
Restaurants in the Yuba and Sutter counties are banding together to resume indoor operations even though they don' have state approval to do so. Casa Carlos in Marysville is reopening indoors at 25-percent capacity, along with Silver Dollar Saloon and Lumberjacks. The restaurants say it is safer to have customers eat inside due to the bad air quality resulting from the recent wildfires.