Unemployment From a Business Owner’s Perspective in California

NOTE: You can always fire an employee “at will.”  It’s just unemployment you have to be concerned about.

 

WHY YOU SHOULD CARE

If you didn’t already know, employers help pay a percentage of their payroll into the California Unemployment pool.  From that pool, ex-employees get their unemployment.  Unlike pregnancy leave, social security, and medicare, it’s the EMPLOYERS and not employees that end up paying into the unemployment pool.  So you have to be mindful that you’re not firing people like crazy unless you don’t care about paying larger sums of money into the unemployment pool.

The California Employment Development Department keeps track of what percent of your pool has been paid out, and the higher the ratio (more payouts) the higher amount of money you have to put back into the pool.

 

HOW EMPLOYEES GET UNEMPLOYMENT

If an employee leaves a job for any other reason EXCEPT for “willful misconduct” or quitting WITHOUT “good cause,” then they will most likely get unemployment.

 

BUT THEY QUIT THE JOB!

Even if an employee voluntarily quits, they can still get unemployment if the have a “good cause.”

Here are some more “good cause” reasons for people to quit:

http://www.edd.ca.gov/uibdg/Voluntary_Quit_VQ_500.htm

For example, I had an employee that voluntarily quit so that they could move out of state to take care of their ill child.  They got unemployment.

Or if you cut an employee’s rate of pay more than 20% and they quit, they will get unemployment!

 

HOW TO PROVE “WILLFUL MISCONDUCT”

The burden is on the employer to prove “willful misconduct” for why you fired an employee.  You want to have as much written records to support your claim.  I generally try and get 1 verbal warning, and two written/signed warnings within a relatively short period before terminating employment.

Even if they miss one day, it may not be enough to disqualify them from unemployment.

There was this instance where an employee was stealing checks for the last year they were working (story about that later), but I didn’t find out until AFTER they were terminated.  Even though I brought that up to the administrative judge’s attention, they still got unemployment!  The odds definitely are stacked in the employees’ favor.

To get more information on unemployment or before you decide to fire anyone, I recommend you read the information here to minimize your unemployment liability. http://www.edd.ca.gov/Unemployment/More_Employer_Information.htm

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