The federal Unemployment Insurance Program (UI) provides weekly benefit payments for workers who lose their job through no fault of their own and are attempting to re-enter the workforce. Eligibility for benefits requires that the claimant be able to work, be seeking work, and be willing to accept suitable work. In California, the UI program is managed by the Employment Development Department (EDD).
The benefit amount is calculated on wages paid during a 12-month period, called the “Base Period.” The Base Period is defined as the first four of the last five calendar quarters the claimant-employee completed during their employment, prior to filing for benefits. The quarter with the highest amount of wages during the Base Period will determine the weekly benefit amount. In California, the minimum weekly benefit amount is $40 and the maximum is $450. Generally, benefits may be collected for a maximum of 26 weeks or 1/3 of the total base period wages, whichever is less.
So, how are unemployment insurance claims investigated and processed by the EDD? To determine whether a claimant-employee is eligible for benefits, the EDD engages in a fact gathering of sorts on whether the job loss was based on no fault of the claimant-employee. Documentation of performance issues is critical. If employment was terminated because of a vague “he/she did not perform their job satisfactorily,” the EDD will interpret that the claimant-employee did not possess the training or skills necessary to perform the job and they will be awarded UI benefits. Under this scenario, EDD will award benefits and provide supporting explanation to the charged employer of: “The reasons for discharge do not meet the definition of misconduct connected with the work.”
In a nutshell the UI process is:
- Employee is discharged;
- Employee files a UI claim with the EDD;
- EDD requests information and documentation from claimant and employer; and
- Initial decision is made based solely on the information provided by both parties.
If the decision is objected to by either the claimant-employee or the employer:
- An appeal is filed;
- Appeal hearing is scheduled and both parties appear and present their position in person;
- Initial appeal decision is made and a written decision is sent to each party;
- Benefits are paid or denied;
- Or Second Appeal is filed; and
- Appeals Board reviews appellate decision for errors. If there are no errors of law, the decision will stand. If there is an error of law, the Appeals Board will reverse the decision and award or withhold benefits.
In conclusion, employers do have a say in how claims are investigated and processed. Terminating employees must be managed through sufficient documentation. Additionally, there is an often overlooked benefit to managing UI claims. Costs can be substantially minimized when claims are kept to a minimum. The cost of UI is generally based on the number of claims that impact an employer’s tax account. Helpful tips for managing costs include answering all EDD claims in a timely manner, appealing all unfavorable rulings, and reviewing costs regularly and carefully to avoid errors.
