California Resources — Unemployment and Disability Insurance, Paid Family Leave, Paid Sick Leave

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The State of California encourages employees to avail themselves of all programs that are available and applicable to the individual circumstances. The state encourages individuals to apply for the programs they believe best fit their needs. These programs are administered by the Employment Development Department (EDD). The EDD as part of it's duties determines each individual’s eligibility for benefits.

UNEMPLOYMENT INSURANCE BENEFITS

Employees are encouraged to apply for Unemployment Insurance (UI) benefits if they are unemployed, which includes reasons such as:

Employees whose hours are reduced due to the quarantine.
Employees who have been separated from their employer during the quarantine.
Employees who are subject to a quarantine, required by a medical professional or a state or local health officer.

Employees can be eligible for benefits if they have enough earnings over the past 12 to 18 months and meet other eligibility criteria. The governor’s executive order waives the one-week unpaid waiting period so employees can collect UI benefits for the first week they are out of work.

An employee may be eligible for unemployment benefits if they choose to stay home from work due to underlying health conditions and concerns about exposure to the virus.

An employee may be eligible for unemployment benefits if their child’s school shuts down, and the employee has to miss work to care of that child who is not ill. The EDD “will determine eligibility on a case-by-case basis” by scheduling a phone interview.

If an employer reduces employee’s hours or shuts down operations due to COVID-19, employees are still encouraged to file an Unemployment Insurance claim. Unemployment Insurance provides partial wage replacement benefit payment to workers who lose their job or have their hours reduced, through no fault of their own. Workers who are temporarily unemployed due to COVID-19 and expected to return to work with their employer within a few weeks are not required to actively seek work each week. However, they must remain able, available, and ready to work during their unemployment for each week of benefits claimed and meet all their eligibility criteria.

Eligible employees can receive benefits that range from $40.00 to $450.00 per week. Depending on an employee’s maximum award for their unemployment claim and employee’s weekly benefit amounts paid, the number of weeks an employee can potentially receive benefit payment ranges from 13 to 26 weeks, if they are paid at their full weekly benefit amount for each of those weeks. Payments could stretch to a longer duration if the employee performs some work for pay or if the employee receives other deductible income during the course of a claim, and the employee receives reduced unemployment benefits as a result during those weeks. The EDD uses the employment insurance calculator to help estimate a worker’s potential weekly benefit amount.

Under the Coronavirus Aid, Relief, and Economic Security Act (CARES) discussed above, eligible individuals may qualify for an extra $600.00 weekly payment. Eligible employees would receive UI benefits for up to 39 weeks. Employees should be encouraged to apply for benefits under the three unemployment programs in the CARES Act.

UI benefits interact with state disability benefits; an applicant may transition from one to the other. An employee can start collecting disability benefits and then transition to an unemployment claim if his or her workplace operations continue to be impacted with a slowdown or shutdown. Also, an employee can start collecting unemployment benefits because he or she was laid off or had their work hours reduced, and then switch to a disability claim if he or she becomes sick.

The same relationship exists between UI benefits and family leave. An employee could start collecting unemployment benefits because he or she was laid off or had their work hours reduced and then switch to a Paid Family Leave benefit if they have to care for a family member who is sick. The state emphasizes that they want to use as much flexibility as possible to ensure that workers are provided the maximum benefit to which they are entitled.

EMPLOYEES WHO WORK REDUCED HOURS MAY COLLECT PARTIAL UNEMPLOYMENT BENEFITS

As noted above, an individual can be considered “unemployed” in any work week of less than full-time work, under certain conditions. That is, if the weekly wage payable to them, when reduced by $25.00 or 25% of the wage payable, whichever is greater, does not equal or exceed their weekly benefit amount. For example, if an employee earned $100.00 in a week, the EDD would not count $25.00 as wages and would only deduct $75.00 from the employee’s weekly benefit amount. For someone who has a weekly benefit amount of $450.00, they would be paid a reduced amount of $375.00.

Once it is determined that the individual is “unemployed” and qualifies for partial UI benefits, then the EDD will calculate their weekly benefit amount and reduced weekly benefit amount.

LAID OFF AND FURLOUGHED EMPLOYEES CAN COLLECT UNEMPLOYMENT BENEFITS

Individuals who have been laid off or furloughed without pay are generally eligible for unemployment benefits. To be eligible for UI benefits, the individual must be considered ”unemployed” as defined by the California Unemployment Insurance Code. An individual is ”unemployed” in any work week that they (1) Perform no services with respect to which any wages are payable; or (2) Have less than full-time work. In the latter case the standard is decided by the calculus described above.

A tutorial as to how full or partial UI benefits are calculated is beyond the scope of this guide but can be found at https://www.edd.ca.gov/unemployment/ui-calculator.htm.

Practice Tip: The CARES Act program, Pandemic Unemployment Assistance (PUA) provides unemployment insurance coverage to independent contractors, gig workers and the self employed. Companies that use independent contractors should carefully review the propriety of those classifications. If an independent contractor applies for unemployment insurance it could trigger an audit by the Department of Labor (DOL) or the Department of Labor Standards Enforcement, or the Employment Development Depart (EDD) investigating whether the company is complying with AB5, the new California independent contractor law. This is also discussed in depth in Sullivan On Comp section 4.58 Independent Contractor. Contact us further to discuss the specific situation in your business.

CALIFORNIA’S WORK SHARING PROGRAM

If COVID-19 has impacted an employer’s business, the employer can prevent potential layoffs by participating in the Unemployment Insurance Work Sharing Program. This program allows employers to retain their workers by reducing their hours and wages. This helps the employer avoid the cost of recruiting, hiring, and training new workers and helps the workers keep their jobs and receive some financial support with unemployment benefits. By utilizing a work-share program the employer and workers can also be prepared to quickly adjust when business improves.

With Work Sharing, employees who may not have otherwise been eligible for partial unemployment benefits may be able to receive some unemployment benefits plus their weekly wages.

Leased, intermittent, seasonal, or temporary service employees cannot participate in a Work Sharing Program. Employees participating in the Work Sharing Program will receive the percentage of their weekly Unemployment Insurance benefit amount equal to the percentage of the reduction in their hours and wages for that week due to work sharing.

California’s workshare program can be accessed at https://www.edd.ca.gov/unemployment/Work_Sharing_Program.htm

DISABILITY BENEFITS

If an individual is unable to work due to having or being exposed to COVID-19 and if the individual has the necessary supporting medical documentation, he or she should file a disability insurance (DI) claim. DI provide short-term benefit payments to eligible workers who have a full or partial loss of wages due to a non-work-related illness, injury, or pregnancy. Most California workers are covered by DI through deductions from their paychecks.

Gavin Newsom’s executive order waives the one-week unpaid waiting period so an individual can collect DI benefits for the first week he or she is out of work. To be eligible for disability insurance benefits, the individual must submit certain medical documentation. This requirement can be met by a medical certification signed by a treating physician or a practitioner that includes a diagnosis and ICD-10 code, or if no diagnosis has been obtained, a statement of symptoms; the start date of the condition; its probable duration; and the treating physician’s or practitioner’s license number or facility information.

Disability insurance benefit amounts are approximately 60 to 70% of wages (depending on income) and range from $50.00 to $1,300.00 a week. The EDD provides a disability insurance calculator to estimate an individual’s potential benefit amount. Disability benefits are paid through the date the individual’s doctor certifies or when the individual exhausts available benefits, whichever occurs first within a 52-week period.

Individuals can qualify for disability benefits if they are quarantined and if their quarantine is certified by a medical professional or a state or local health officer. If an employee is not found eligible for DI, they are encouraged to apply for unemployment insurance.

PAID FAMILY LEAVE

If a family member is sick and an employee has to miss work to care for that person, they may be eligible for Paid Family Leave benefits. The state makes clear that if an employee is unable to work because they are caring for an ill or quarantined family member with COVID-19, Paid Family Leave may apply. Paid Family Leave provides up to six weeks, which is extended to eight weeks starting July 1, 2020, of benefit payments to eligible workers who have a full or partial loss of wages because they need time off work to care for a seriously ill family member or to bond with a new child. For purposes of PFL coverage, a family member is defined as a seriously ill child, parent, parent-in-law, grandparent, grandchild, sibling, spouse, or registered domestic partner.

To be eligible for PFL benefits, the worker must submit medical documentation regarding the family member in their care who is either ill or quarantined due to COVID-19. This requirement can be met by a medical certification for that person from a treating physician or a practitioner that includes a diagnosis and capital ICD-10 code, or if no diagnosis has been obtained, a statement of symptoms; the start date of the condition; it's probable duration; and the treating physician’s or practitioner’s license number or facility information. This requirement can also be met by a written order from a state or local health officer that is specific to a family member situation. Absent these documents form a physician or health officer, you may be eligible for unemployment insurance. Telehealth and virtual appointments are acceptable for a physical examination, but medical certification is still required.

PAID SICK LEAVE

Employees can use California mandated Paid Sick Leave to care for themselves or a family member who is sick or requires preventative care when civil authorities recommend quarantine.

Under California law, most employees who work for 30 days or more within a year of starting work are eligible for paid sick leave. Employees are eligible to accrue sick leave hours to get paid while on leave for certain reasons, including caring for a family member or when the employee is ill and unable to work.

The amount of sick leave an employee can accrue per year depends on the individual's paid sick leave plan. At a minimum, California law requires 24 hours (or 3 days) of paid sick leave per year for full-time employees. Employees earn a minimum of 1 hour of paid leave for every 30 hours worked.

An employee is entitled to begin using accrued paid sick time beginning on the 90th day of employment.

Paid sick leave can also be carried over to the next year if an employee does not use their sick leave. However, employers can put a cap on the total amount of accrued sick leave at 48 hours or 6 days.

Paid sick leave is available for full-time workers, part-time workers, and temporary employees. There are some restrictions for certain employees who do not fall under the California sick leave laws for regular employees, including workers with a collective bargaining agreement, in-home supportive care providers and some sir carriers.

California sick leave can be used for reasons other than illness, including:

Seeking a diagnosis,
Preventative care, or
Treatment and safety planning related to domestic violence, sexual assault, or stalking.

Employers cannot deny an employee's right to use sick time or retaliate against an employee for using sick leave.

When employees exhaust benefits under Emergency Sick Leave for their own illness or are caring for an ill family member, and need additional leave, employers should offer employees the ability to use their accrued sick leave pursuant to California’s Sick Leave mandate.

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California Resources — Unemployment and Disability Insurance, Paid Family Leave, Paid Sick Leave

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