As millions of displaced workers seek economic relief in the form of California’s Unemployment Insurance (UI) program, the federal government has stepped in to supplement it (and each state’s UI program) with funding through the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Read about 2020 agency actions.
This page contains the following information:
Through no fault of their own, many employers have been forced to cut their workforces, and they want to help their displaced workers through these trying times. This page guides you and your newly displaced workers through the UI benefits process in California.
California’s UI program provides payments to workers who’ve lost their jobs or had their hours reduced, and who meet the program’s eligibility requirements. In the recent past, UI eligibility required that the displaced worker be:
Due to the COVID-19 pandemic and resulting “stay at home” orders, however, the California Employment Development Department (EDD) has temporarily eliminated two major eligibility requirements:
For more information, see Unemployment Insurance.
Beginning the week of April 6, the EDD began paying an additional $600 in addition to the weekly benefit amount, the funding for which comes from the federal CARES act. This program, also referred to as the Federal Pandemic Unemployment Compensation program (FPUC), is currently in effect until July 31, and eligible individuals can receive the extra benefit for the week ending April 4, 2020, but the program is not retroactive before that.
Each displaced worker will receive the additional weekly $600 regardless of their regular weekly benefit. For example, an individual currently receiving the average weekly UI benefit of $340 will get $940 per week. Because benefits are paid every two weeks, this would amount to $1,880 per check. Individuals receiving the minimum benefit amount of $40 per week would likewise get the $600 weekly CARES Act payment, receiving $640 per week and $1,280 per check.
Displaced workers need not apply for the extra funding — the EDD will automatically add it for each claimant.
In addition to the weekly $600 supplement to UI benefits, the CARES Act also includes a 13-week extension of benefits for claims filed between March 29, 2020, and the end of the year. This federally-funded extension, known as the Pandemic Emergency Unemployment Compensation (PEUC), will occur after an individual’s regular claim is exhausted.
Congress is considering whether the extend the FPUC program after expiration on July 31, 2020. If it does, it’s unclear how long the extension would be or if the amount of supplemental UI benefits will remain the same or be reduced.
In the recent past, independent contractors — along with self-employed workers and business owners — weren’t eligible for UI benefits. But the $2 trillion CARES relief package, which includes the federal Pandemic Unemployment Assistance (PUA) program, changed that. The PUA program will provide displaced independent contractors, self-employed individuals and business owners with a minimum of $167 per week, which may be increased up to $450 per week depending on reported income. These previously ineligible workers will also receive the same $600 per week benefit package available to “traditional” displaced workers during the pandemic through the end of July.
PUA eligibility criteria and benefits are different from the standard UI. Under PUA, workers are eligible for benefits if they meet any of these requirements:
Displaced independent contractors, self-employed individuals and business owners should monitor the EDD’s Pandemic Unemployment Assistance webpage, has instructions for filing a claim for PUA benefits.
For more information on Independent Contractors, see Independent Contractor.
Employers should consider assisting their displaced workers by offering information on how to apply for UI benefits. If you’re fortunate enough to resume business-as-usual when the economy opens up, your returning employees likely will appreciate the assistance you provided when their cards were down.
To apply for benefits, individuals will need to provide their personal information and:
There are three ways to file a UI claim:
Online: This is the fastest way to have a claim accepted and begin receiving benefits. Displaced workers can visit the EDD’s UI Online page and apply during the following times:
By phone: Individuals can reach an EDD representative Monday through Friday from 8 a.m. to 12 p.m., though wait times may be long due to extremely high traffic.
By mail or fax: Applicants fill out one of the following forms, then mail or fax the form to the location provided on the last page of each form:
When an employee files a claim for UI benefits, employers will receive a Notice of Unemployment Insurance Claim Filed from the EDD. Employers should respond with 10 days. Failure to timely respond waives the right to appeal the EDD’s eligibility determination.
After a timely response, the employer will receive a Notice of Determination/Ruling, advising the employer of the EDD’s eligibility decision. Employer have the right to appeal the EDD’s decision if they disagree.
When responding to EDD notices, ensure that any reason given for the separation from employment is accurate, well-documented and consistently explained.
For more information on responding to claims and employee eligibility, see Responding to Unemployment Insurance Claims.
As a potential alternative to layoffs, employers should consider the EDD’s Unemployment Work Sharing Program.
The work sharing program allows employers to reduce employee work schedules rather than laying off workers, while allowing these employees to simultaneously collect partial unemployment benefits for the time reduced.
For example, instead of laying off 20 percent of employees, an employer could reduce employees’ hours by 20 percent and unemployment insurance (UI) would pay part of the difference in wages to employees. The program helps employers keep their workforce intact during a slowdown, enabling them to ramp up business activity more quickly as conditions improve.
To participate, employers must submit an application to the EDD. Generally, employers would have to submit the Work Sharing Unemployment Insurance Plan Application (DE 8686) in writing, but when Newsom issued Executive Order N-50-20 on April 15, 2020, he directed the EDD to establish an electronic means of expediting access to the work sharing program and gave the EDD discretion to suspend certain application requirements for that purpose. The Work Sharing Application is now available online.
To be eligible for work sharing, the EDD states that employers must meet all of the following requirements:
One downside to the work sharing program is that it’s administratively burdensome. In addition to the application itself, once approved, employers must send weekly certifications to the EDD for each participating employee. Employers will be charged for work sharing unemployment insurance in the same manner as regular UI benefits. While this has the potential to increase employers’ UI tax rate, layoffs would have the same result when the employees who were let go file for unemployment benefits.
Employers should consult with legal counsel to determine if the work sharing program is a good strategy given their particular circumstances. The program may allow employers to avoid layoffs and stay in operation at a reduced capacity.
Additionally, the CARES Act adds complexity to this issue. As discussed above, the CARES Act provides a flat $600 weekly benefit in addition to traditional benefits through the end of July. In some cases, individuals are making more than their ordinary working wages putting employers in the strange position of competing with unemployment for workers. Some employers trying to rehire or recall their employees as they reopen are being met with hostility because employees know that once they’re recalled or offered a job, they’re likely ineligible for continued UI benefits (more on that below).
Because of the way the CARES Act is written, however, the work sharing program could actually be a particularly good option for employers. The CARES Act does not prorate the payments for partial unemployment, so employees receiving partial unemployment benefits, even as little as $1, under the work sharing program will also receive the flat $600 CARES Act payments. Thus, employees may be able to work and collect wages for reduced hours, while also collecting partial state UI benefits and the $600 weekly federal payment. This could potentially ensure workers receive their full wages (or more in some cases), mitigate tensions in employee relations and allow employers to continue operating at reduced hours. Though the CARES Act benefits expire at the end of July, Congress is currently considering extending the benefits.
Employers can read more about the program and how to apply on the EDD’s work sharing site.
