Unemployment Insurance

The unemployment insurance (UI) system in the United States is a federal and state program. In California, employers finance the cost of the program through state and federal UI taxes. You can substantially reduce the UI tax you pay by carefully monitoring the Employment Development Department (EDD) tax bills and protesting claims by ineligible former employees. The UI tax is one of the few employment-based taxes that you can reduce.

This section explains how UI is financed and which wages are subject to UI taxation. You will learn which employers are covered and what the employer obligations are. This chapter also discusses UI claims, how to respond to them and how UI interacts with other benefits, such as vacation pay.

Wages Subject to Unemployment Insurance TaxWages Subject to Unemployment Insurance Tax
Payments by the day, by the hour, by piece rate or any other measurement are wages for purposes of unemployment insurance.

Employers Subject to the Unemployment Insurance TaxEmployers Subject to the Unemployment Insurance Tax
With a few exceptions as noted below, all California employers fall under the UI laws and must pay the UI tax.

Making an Unemployment Insurance ClaimMaking an Unemployment Insurance Claim
To be eligible for UI benefits, a claimant must do the following.

Responding to Unemployment Insurance ClaimsResponding to Unemployment Insurance Claims
If you receive a Notice of Unemployment Insurance Claim Filed from the EDD, there are several steps to follow.

Combining Unemployment Insurance With Other BenefitsCombining Unemployment Insurance With Other Benefits
Under limited circumstances, if a claimant receives other payments, his/her UI benefits may be affected.

Work Sharing ProgramWork Sharing Program
As a potential alternative to layoffs, employers should consider the EDD's Unemployment Work Sharing Program.

Unemployment Insurance

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