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What's the Effect of an Unemployment Claim on Employer's UI Rate

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  • 11-24-2010, 10:26 PM
    fishsticks
    Re: UI Claim Effect on Employer's UI Rate
    Quote:

    Quoting cbg
    View Post
    .... So yes, if the employer contests, the employee gives up, but the state can see based on the information they have that the employer has not proven their case, the employee can still get benefits.

    Thanks for the feedback, cbg. I think I understand what you're saying. What's still unclear is the responsibility of a prior employer when a current employer lays someone off. Let's say someone works concurrently for Company A and Company B for 5 years. A pays 80% of the person's income, B pays 20%. The person voluntarily quits A. There is no dispute that it was voluntary. Three months after quitting A, the person is layed off from B.

    The person files for unemployment and they establish a base period which includes income from both A and B. According to everything I've read on the EDD website, only the last employer (B) is contacted with the Notice of Claim Filed (DE1011CZ), etc. Is this correct? So even though the majority of the income was earned from A, from which the person voluntarily quit, the person will still receive benefits (for the sake of argument, let's assume that the person qualifies for benefits due to being layed off from B) based on the highest quarter in his/her base period, which includes income from A. And is it further correct that A will not even be contacted?

    Sorry for the long post. I guess my question could have been summed up like this: Is only the last employer contacted when someone files an unemployment claim, even though a person had multiple employers during a relevant base period? Furthermore, is only the last employer subject to having funds taken from the reserve account to pay for the benefits, and only the last employer subject to having their UI rates increase?

    Thank you so much to anyone who made it through this post. Any additional help will be greatly appreciated.
  • 11-25-2010, 06:03 AM
    PattyPA
    Re: UI Claim Effect on Employer's UI Rate
    Employer A could probably request a "relief from charges", which means even if the employee is granted benefits, employer A's reserve account would not be charged.
  • 11-25-2010, 10:04 AM
    fishsticks
    Re: UI Claim Effect on Employer's UI Rate
    Quote:

    Quoting PattyPA
    View Post
    Employer A could probably request a "relief from charges", which means even if the employee is granted benefits, employer A's reserve account would not be charged.

    Thanks PattyPA. This seems to suggest that A will be contacted in this scenario.

    Hope I'm not being tedious here, I'm just trying to understand the process. Also, I realize that there may not be a definitive answer to these questions... as the EDD website states, claims are handled on a case-by-case basis.
  • 11-25-2010, 11:04 AM
    PattyPA
    Re: UI Claim Effect on Employer's UI Rate
    Make no mistake about it; Company A WILL be notified that the employee has filed a claim, if Company A is in the base period, i.e., the employee worked there during any the first four of the last five completed quarters from the date the claim is filed. That means, if the employee files a claim in 4th quarter 2010, Company A will be notified if the employee had earnings in any quarter between 3rd quarter of 2009 and 2nd quarter of 2010.
  • 11-25-2010, 11:26 AM
    fishsticks
    Re: UI Claim Effect on Employer's UI Rate
    Quote:

    Quoting PattyPA
    View Post
    Make no mistake about it; Company A WILL be notified that the employee has filed a claim, if Company A is in the base period, i.e., the employee worked there during any the first four of the last five completed quarters from the date the claim is filed. That means, if the employee files a claim in 4th quarter 2010, Company A will be notified if the employee had earnings in any quarter between 3rd quarter of 2009 and 2nd quarter of 2010.

    Much appreciated, I appreciate the clarification.

    Ok, so what happens if the employee voluntarily quit Company A and there are no extenuating circumstances? To highlight the issue I'm trying to get at, let's say the employee earned $12,000 per quarter in the base period (enough to qualify for max benefits in CA) from Company A and $200 per quarter from Company B.

    Subsequent to quitting Company A the employee is layed off from Company B. A claim is filed, Companies A and B respond truthfully. Let's assume that the layoff from Company B qualifies the employee for benefits. What base period income figure is likely to be used to determine the amount of benefits? Will the person be able to collect max benefits, will the earnings from Company A not be counted, or...?

    Thanks for sticking with this thread.
  • 11-25-2010, 12:03 PM
    PattyPA
    Re: UI Claim Effect on Employer's UI Rate
    Then Company A can protest the claim. If the employee has worked for Company B long enough, he will probably be granted benefits, and such benefits WILL be based on all wages earned from both employers in the base period. Generally speaking, if the employee earned 75% of his total wages from Company A, then 75% of his benefits will be charged to Company A. However, Company A can request a "relief from charges" which, if granted, means Company A's UI rate will not be otherwise affected.

    Honestly, if I can say so again, you're REALLY overthinking this. If your employee is causing problems at work, then you either tell him to knock it off (if you think he's salveageable) or fire him, if you don't. Is is really worth upsetting the whole apple cart because your UI rate MIGHT go up .1 or .2% (and even that is not a sure thing)? This is insurance after all, it's there in case it's needed. One firing, even if TOTALLY charged to your reserve account, over 14 years, is almost certainly NOT going to result in a rate increase.
  • 11-25-2010, 12:46 PM
    fishsticks
    Re: UI Claim Effect on Employer's UI Rate
    Quote:

    Quoting PattyPA
    View Post
    Then Company A can protest the claim. If the employee has worked for Company B long enough, he will probably be granted benefits, and such benefits WILL be based on all wages earned from both employers in the base period. Generally speaking, if the employee earned 75% of his total wages from Company A, then 75% of his benefits will be charged to Company A. However, Company A can request a "relief from charges" which, if granted, means Company A's UI rate will not be otherwise affected.

    This is exactly what I was trying to understand. Thanks so much for your explanation and patience.


    Quote:

    Quoting PattyPA
    View Post
    Honestly, if I can say so again, you're REALLY overthinking this. If your employee is causing problems at work, then you either tell him to knock it off (if you think he's salveageable) or fire him, if you don't. Is is really worth upsetting the whole apple cart because your UI rate MIGHT go up .1 or .2% (and even that is not a sure thing)? This is insurance after all, it's there in case it's needed. One firing, even if TOTALLY charged to your reserve account, over 14 years, is almost certainly NOT going to result in a rate increase.

    Totally agree with you. In fact I spoke with him yesterday and his employment will end on Dec. 31st. Didn't mean to go overboard on this, just trying to figure it all out. Plus, I've been talking to various people the last couple of weeks and it's clear that there's a lot of confusion out there-- everyone has "heard" this or that, or had cases go against their understanding of the process.

    Thanks again for the help, PattyPA. I've also been reading through the archives and learning a lot. Happy Thanksgiving!
  • 11-25-2010, 06:41 PM
    PattyPA
    Re: UI Claim Effect on Employer's UI Rate
    You're welcome. I used to manage the UI claims process for a company with operations in many states, including California.

    Good luck with a new employee.
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