California employment dept. selects new payment vendor after extensive fraud
California last week announced it’s hired a new unemployment and disability payment contractor in an attempt to remedy its multi-billion-dollar pandemic fraud, which caused chaos for laid-off workers and fueled police busts.
The move comes as the Employment Development Department begins its five-year, $1.2 billion tech overhaul known as EDDNext. The news was first reported by CalMatters.
The department said it plans to start notifying 850,000 benefit recipients of the new payment provider, Money Network, an electronic payment company also used by Gov. Gavin Newsom to distribute stimulus checks during the COVID-19 pandemic.
Similar to the EDD’s previous deal with Bank of America, the state’s former payment vendor, the contract with Money Network will primarily be paid for through a debit card revenue-sharing agreement. Officials said the new EDD cards will include both the security chips and tap-to-pay options commonly found in consumer credit cards.
The agency said it will also pay $32 million over five years for Money Network to offer a direct deposit option to workers’ bank accounts, which EDD plans to roll out next spring.
The employment department said people receiving unemployment, disability and paid-leave benefits will next month recieve new Money Network debit cards, with payments starting Feb. 15.
Those with Bank of America EDD debit cards have until April 15 to spend their remaining balances.
