Get Tips, Templates, and Help Responding to
Employee Unemployment Claims
*** Updated for January 1, 2022
You go to work as usual and in reading the day’s mail, you see an envelope from California EDD. As your blood pressure goes up and you silently start cursing that it is another penalty assessment for something filed wrong, lo and behold – it is something more infuriating – your former employee has filed an unemployment claim. OK, what do you do now? Does this mean your unemployment taxes are going to skyrocket? How much will it cost, and what can you do to avoid this from happening again?
Read on, fellow business owner, and check out our tips for dealing with the ex-employee’s unemployment claim.
Employee Filed for Unemployment – Understanding the Unemployment Documents You Received
The documents you received mean that your former employee has filed an application with the California Employment Development Division to receive unemployment benefits. You probably received a document called “Notice of Unemployment Insurance Claim Filed.” Unemployment Benefits are funded by taxes paid by employers on the amount of wages the employer pays to his or her employees. Each employer’s tax rate is different. The rate of tax an employer pays is influenced by the number of prior claims for unemployment benefits that have been filed against that employer. The more claims that have been filed against an employer, the higher the tax rate is for that employer.
There are over 188,000 Unemployment
Claims Filed in California Each Year
That makes over 500 each day.
The Unemployment Benefits Process
To initiate the process of receiving unemployment benefits from unemployment insurance, the former employee must file a claim with the Employment Development Department (EDD). An employee can file a claim with the EDD online, through the mail or over the telephone. There is no specific time period in which the employee must file a claim. An employee can file a claim any time after he or she is terminated or his or her hours are reduced. After a claim is filed, there is a mandatory one-week waiting period in which the EDD will process the employee’s claim and determine whether or not the employee is eligible to receive unemployment benefits. The EDD will conduct interviews with the employee, employer and anyone else it believes is necessary to determine the employee’s eligibility for unemployment benefits.
The requirements an employee must satisfy to receive unemployment benefits are:
- Employee must file a claim;
- Employee must be unemployed or have substantially reduced work hours through no fault of his or her own;
- Employee must be able to work and available for work;
- Employee must be actively seeking work.
- Employee must have earned enough money during the base period
- Employee must meet the eligibility requirements each week benefits are claimed
After filing a claim, every two weeks the EDD re-verifies that the employee still satisfies each of these five requirements. If at any time the employee does not meet one of these criteria, the EDD can reexamine whether the employee is entitled to unemployment benefits.
Tips for Responding Effectively to an EDD Unemployment Claim
After an employee files a claim for unemployment, the EDD will mail you the form Notice of Unemployment Insurance Claim Filed. You have 10 days to contest in writing the receipt of unemployment benefits by the specific employee. Your response should contain all relevant facts that demonstrate the employee is not eligible for unemployment benefits. The most common way for an employer to contest an employee’s claim for unemployment benefits is to dispute that the employee was terminated, discharged, etc. through no fault of his or her own. An employee can ask for unemployment benefits only if the employee was fired, laid off, or otherwise terminated for no real reason. If the employee engaged in wrongdoing or misconduct, they are not entitled to unemployment.
How Long Does an Employer Have to Respond to Unemployment?
In California, you have 10 days to contest the claim and respond to the unemployment claim application.
How to Respond to Unemployment Claim Showing Employee Misconduct
In responding to an EDD unemployment claim, you should try to argue that the employee’s “misconduct” is what led to unemployment.
To prove an argument for misconduct the employer must show:
- The employee owed the employer a duty that was violated. Duties include such standards as showing up for work, refraining from harassing conduct or fighting, abstaining from theft, etc.
- There was a substantial breach of the duty owed by the employee to the employer. Single violations of a duty are not generally enough to establish misconduct unless a major infraction is involved. Normally, there must be proof that the unacceptable behavior had been repeated throughout the employment. Written warnings or documentation to prove these repeated violations or breaches will significantly assist an employer when disputing an employee’s claim for unemployment benefits.
- The breach must be willful, wanton or deliberate on the part of the employee. This standard measures the employee’s own role in his or her termination. To satisfy this element the employer must show that the employee was aware of the unacceptable behavior and could have controlled it. Negligence or poor performance is generally not enough. Once again, documentation is a valuable tool.
- The breach disregards the employer’s interest and injures or tends to injure the employer’s interest. In order to prove this element the employer must show that he or she suffered or could have suffered financial loss as a result of the former employee’s actions, or that the employer’s business was significantly interrupted as a result of the employee’s actions. The misconduct must be work related.
- Finally, the employer must show that there was a final incident that triggered the termination. The termination needs to have been caused by this final incident of misconduct. The EDD usually examines the final incident first and then works backward over the employment relationship. Thus, the employee’s failure to improve after a warning does not imply misconduct because it does not indicate a particular event that triggered the discharge. The final incident should contain the four elements required to prove misconduct listed above.
The following are examples of misconduct will usually result in a denial of unemployment benefits:
- Voluntary quitting without good cause.
- Refusing to work
- Violating company rules. The employer must be able to prove the employee had knowledge of the rules before the rules were violated, and that the rules were lawful and reasonable.
- Unexused attendances. Usually, the poor attendance must be repeated, unexcused, and for a non-compelling reason. For example, if an employee does not come to work by choice / being lazy; not because they have to take care of an ill child, or have to go to jury duty.
- Criminal conduct
- Use of drugs or intoxication on the job. There must be some evidence that the substances were used while on the job.
- Inexcusable fighting with other employees
- The employer’s request must be reasonable and the employee’s refusal to comply must be willful and unjustified.
- Employee was a temporary employee and a student and is returning to school.
- The Employee is already working somewhere else
- The Employee cannot legally work in the U.S.
Here are some examples of conduct that are usually not enough to deny an application for EDD unemployment benefits:
- Termination for misconduct.
- The employee was let go for being inefficient
- The employee was let go for inadvertent mistakes or good-faith errors in judgment
- The employee could not perform essential job duties
- The employee refused to sign a disciplinary note to acknowledge receipt
- The employee quit for a good reason (such as, returning back to school, change in travel distance due to a move, having a seriously ill family member, being a victim of domestic violence).
- Voluntary quitting for “good cause.” Good cause occurs when a substantial motivating factor causes the claimant to leave work. The factor need not relate to work. It must be a real, substantial and compelling reason that would cause a reasonable person who wants to remain employed to leave work under the same circumstances. Here are some examples that do not constitute good cause: increased child care costs, looking for another job, or a change in job duties or a demotion.
In the last 12 months, California Employers
have paid more than $1 BILLION
in Unemployment Benefits to unemployed workers.
Contesting the Unemployment Claim – What To Do If Your Employee Quit
If your employee quit or resigned, did the employee put the reasons for the resignation in writing? If yes, you can use the resignation letter in case the employee files for unemployment insurance benefits.
Employer Response to the Unemployment Claim – The Decision and Appeal Process
Once you contest an employee’s claim for unemployment benefits, the EDD will gather all necessary information and provide a written decision. If the EDD determines that the employee is ineligible to receive unemployment benefits, the employee’s claim or already existing payments will be denied. After being disqualified, an employee can reapply for unemployment benefits after resolving whatever issue caused the employee to be disqualified/ineligible.
If the EDD determines the employee is eligible to receive unemployment benefits, an employer has the right to protest this decision. If the employer chooses to protest the decision, the employer must mail in an appeal with the following information within 30 days from the date the EDD mails the notice of its decision to the employer:
- Name of the business and the business address
- Employer’s reserve account
- Employee’s social security number
- Name and mailing address of any representative
- Reason for the appeal
- A copy of the decision that the employer is appealing
- If the appeal is late, a reason why the employer failed to comply within the required 20-day period.
If the employer’s appeal is accepted, the administrative law judge (ALJ) will conduct a hearing in which both the employer and employee will be present and allowed to put forth evidence, including witnesses. Before the hearing, all of the documents within the file regarding this claim will be available for both parties to review. These documents will include not only the documents provided by the parties, but also any documents gathered by the EDD representative overseeing the claim.
An employer doesn’t have to attend the appeal hearing in person. He or she can request to attend the hearing by telephone instead. If the employer requests to appear by telephone, the EDD will notify the employer of the telephone number to call and the time of the hearing, along with a copy of the claims file before the hearing. After the hearing, the ALJ will issue its decision to all parties.
Appealing to the California Unemployment Insurance Appeals Board
If the employer disagrees with the ALJ’s decision, you still have the option to file a letter of appeal with the California Unemployment Insurance Appeals Board (CUIAB). This appeal must be filed within 20 days of the mailing date of the ALJ decision, unless the employer can show good cause for filing it later. In the letter of appeal, the employer must be sure to identify the parties, the case number, the employee’s social security number, the employer’s reserve account, the name and mailing address of any representative, the ALJ’s decision and the reason(s) for the appeal.
After the CUIAB receives the letter of appeal, it will send a letter to acknowledge receipt of the appeal. Within 10 days of this letter, the employer or employee must request to submit written or oral argument. The CUIAB generally does not consider new evidence in its decision, and only grants oral or written argument in cases when time permits or when there are unusual issues. The decision of whether to accept written or oral argument is solely at the discretion of the CUIAB.
Once a decision is made by the CUIAB, the employer will receive written notification in the mail. At this point, all administrative remedies are exhausted. If an employer wants to appeal the CUIAB’s decision, he or she must do so through the court system.
The Employee’s Unemployment Benefits Were Approved. What Does this Mean for Your Business?
If an employee is ultimately determined eligible for unemployment benefits, then the amount of compensation he or she receives will be determined by the employee’s “base period” earnings. The base period is a 12-month timeframe beginning approximately 15 to 17 months prior to the date the claim is filed. The EDD generally omits the most recent three to five months before the claim and uses the 12 months before the omitted months as the base period.
Once the base period is established, the EDD divides the 12 months into four quarters. The highest quarter of earnings during the base period will determine the amount of benefits the employee will receive each week. The total amount that an employee may receive for a claim is either 26 times the weekly benefit amount or one half of the total base period wages, whichever is less. To be eligible for unemployment benefits, an employee must have earned at least $1,300 in one quarter of the employee’s base period, or have earned at least $900 in the highest quarter and total base period earnings of 1.25 times the employee’s highest quarter earnings. The minimum amount of benefits an employee can receive each week is $40 and the maximum amount is $450.
If more than one employer employed an employee during the base period, the EDD will request information from those employers regarding the employee’s earnings. A “base period employer” must respond to the EDD’s request for information within 15 days after the request is mailed from the EDD. The response provided by the base period employer should also include information about why the employee resigned or was terminated from his or her employment with that base period employer. After receiving this information, the EDD will determine if the base period employer’s reserve account should be charged for the employee’s claim for unemployment benefits. If the base period employer fails to respond within 15 days, the base period employer’s reserve account will likely be charged.
How Does an Employee Filing for Unemployment Affect the Employer?
In California, an employee that files for unemployment affects the employer if the claim is approved and benefits are paid to the employee. The employer’s unemployment tax rate is based on approved claims.
► Getting Legal Help
AXIS Legal Counsel’s Business and Corporations Practice provides legal advice to numerous businesses with a wide range of business matters. Axis represent small, medium-sized, and large business clients with a wide variety of business and corporate law matters. We represent early-stage companies as well as established businesses on a wide variety of business law matters, ranging from contracts and transactions, intellectual property, labor/employment law, business financing, mergers and acquisitions, real estate, insurance, business succession planning, and general advice and counsel. For information on retaining AXIS Legal Counsel to represent your business in connection with any legal matter, contact firstname.lastname@example.org or call (213) 403-0100 for a confidential consultation.
► Download All 2020 Business Essentials Package – $49 Only
Check out our complete line of handy forms and templates for California small businesses.
Download Our Entire Suite of
Templates, Policies, and Procedures
Our 17 Most Popular Forms – Only $49
*** NOW UPDATED FOR 2022 ***
► Submit a Question
Have a question that is not answered? Submit your question below so we can help other businesses by contributing to the knowledge base.
Leave A Comment