Unemployment Insurance |
May 12, 2015

Filing for Unemployment Insurance

The California unemployment insurance program provides temporary and partial wage replacement for employees who are unemployed through no fault of their own. The program is administered by the California Economic Development Department (EDD). The system is funded by employers through taxes. An employer may contest an employee’s claim for unemployment benefits. Some employers routinely “fight” unemployment claims to keep their taxes lower. The maximum weekly benefit amount is $500, and is based on the employee’s earnings. The amount of benefits will be reduced if the employee earns income from other sources, such as new employment or independent contract work. Severance pay usually will not reduce the benefit amount. Most employees can claim up to 26 weeks of benefits in a benefit year.

There are eligibility requirements to receive unemployment benefits. The two most important are past earnings and no-fault separation. Regarding past earnings, EDD looks to a base period to determine if the employee earned sufficient wages to make a claim for unemployment benefits. The base period typically includes the 12 months ending four to six months before the employee filed her claim. The employee must have earned a minimum amount of wages during any one of those quarters in order to receive the minimum benefit. Wages earned from self-employment are excluded. The EDD uses the base period to determine the employee’s weekly unemployment benefit.

Regarding no-fault separation, here’s the basic rule: benefits are not paid to employees who voluntarily quit or resign from their job, or to employees who are fired for misconduct. But an employee who loses her most recent job through no fault of her own should receive benefits. This includes employees who lose their jobs through layoff or lack of work, sale of the employer’s business, or discharge for reasons other than misconduct. So, an employee who loses her job due to poor performance or failure to meet the job requirements will probably qualify for benefits, but an employee who is terminated for insubordination, ignoring the employer’s lawful instructions, dishonesty, theft, violence, or chronic absenteeism may not be eligible for benefits.

Sometimes employees quit for a good reason, such as nonpayment of wages, significant health issues, unsafe working conditions or other intolerable conditions. These employees may still receive benefits so long as they have made reasonable efforts to keep their jobs, even if that means accepting a job transfer or offer to take a leave of absence (such as for a health condition). However, changes in the employee’s work schedule, low job satisfaction, feeling overwhelmed (or dissatisfied) in the job, going back to school, objecting to a disciplinary action, or resigning to avoid termination may not be considered good reasons to quit for unemployment purposes.

Employees should be honest on their applications for benefits. For example, don’t give the reason for separation as “layoff” if the employer told the employee that the reason was “not a good fit.”  Employees should also report their income. The consequences of making a false statement can result in the loss of benefits, even benefits that have already been paid. It can also hurt the employee’s credibility in a case involving whether the termination decision was unlawful.

Finally, whether the employee is entitled to benefits is determined based on a phone interview. Employees who are denied benefits can appeal the decision simply by submitting the correct paperwork on time. If the employee appeals, then EDD will conduct an in-person hearing, where the employee can explain why she is entitled to benefits.