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 available and applicable to their individual circumstances and needs. The programs in this section are administered by the Employment Development Department (EDD). Its duties including determining an individual’s eligibility for benefits.

UNEMPLOYMENT INSURANCE BENEFITS

Employees should apply for unemployment insurance (UI) benefits if they are unemployed because:

Their hours are reduced due to quarantine.
They have been separated from their employer during quarantine.
They are subject to a quarantine required by a medical professional or a state or local health officer.

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

An employee might be eligible for unemployment benefits if she or he chooses to stay home from work due to underlying health conditions and concerns about exposure to the virus.

An employee might be eligible for unemployment benefits if his or her child’s school closes, and the employee has to miss work to care for that child. The EDD determines eligibility on a case-by-case basis via a phone interview.

If an employer reduces workers' hours or shuts down operations due to COVID-19, employees still should file a UI claim. The benefit partly replaces wages for workers who lose their jobs or some of their hours through no fault of their own. Such workers who temporarily are unemployed due to COVID-19 and expect to return to work for their employer within a few weeks are not required to actively seek work each week. But they must remain able and available to work during their unemployment for each week of benefits claimed, and meet all their eligibility criteria.

Eligible employees receive benefits that range from $40 to $450 per week. Depending on an employee’s maximum award for the unemployment claim and the weekly benefit paid, he or she may receive benefits for 13 to 26 weeks, if he or she is paid at the full weekly benefit amount for each of those weeks. Payments could last longer if the employee performs some work for pay or if he or she receives other deductible income during the course of the claim, and, as a result, receives reduced unemployment benefits during those weeks. The EDD uses an employment insurance calculator to help estimate a worker’s potential weekly benefit amount.

Under the Coronavirus Aid, Relief, and Economic Security Act (CARES) discussed in previous sections, some individuals may qualify for an extra $600 weekly payment. Eligible employees would receive UI benefits for as long as 39 weeks. Employees should apply for benefits under the three unemployment programs in the CARES Act.

UI benefits interact with state disability benefits, and an applicant may transition from one to the other. An employee may start collecting disability benefits, then transition to an unemployment claim if his or her workplace continues to be impacted with a slowdown, or closes. An employee who begins collecting unemployment benefits because of a layoff or reduction in hours may 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 of layoff or reduction in hours, then switch to a paid family leave benefit if she or he must care for a family member who is sick. The state intends to be as flexible 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 others.

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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