I’ve Been Denied Unemployment: What Should I Do?

By:  Marissa C. Marxen

October 9, 2017

            The Employment Development Department (the “EDD”) handles claims for unemployment insurance benefits.  Typically, an employee files a Notice of Claim with the EDD, and then, the employer has the opportunity to respond to the claim, which the employee has the right to see, but that response will not be automatically sent to the employee.  Once both sides have “made their case,” the EDD issues a Notice of Determination/Ruling.  

            If you disagree with the Notice of Determination/Ruling and feel you have been wrongfully denied benefits, you have the right to file an appeal.  You must file the appeal within thirty (30) days of the mailing ate on the Notice of Determination/Ruling.  After sending off your appeal, which can be as simple as a letter brief, the EDD will review the appeal.  If your appeal does not change its decision, it will send the appeal to the California Unemployment Insurance Appeals Board (the “CUIAB”).  The CUIAB will then send notice of the date, place, and time of your hearing.  The hearing will take place before an administrative law judge and is rather informal compared to hearings in court.  While an attorney is not necessary, you may want to retain one or at least consult one prior to representing yourself.

            Further, even if you have been denied benefits, you must continue to certify for benefits throughout the entire process and until you receive the administrative law judge’s decision.

            In order to determine whether you should appeal the EDD’s Notice of Determination/Ruling denying your benefits, you should consider the following:

A.                 Are You Unemployed?

            The provisions of the California Unemployment Insurance Code require a person to qualify as “unemployed” to be eligible for unemployment insurance benefits.  An individual qualifies as “unemployed” if, in any week: 

(1)   During which he or she performs no services and with respect to which no wages are payable to him or her; 

(2)   Any week of less than full-time work, if the wages payable to him or her with respect to the week, when reduced by twenty-five dollars ($25) of 25 percent of the wages payable, which is greater, do not equal or exceed his or her weekly benefit amount; 

(3)   Except for the requirements of subdivision (d) of Section 1253, he or she would be eligible for benefits under Section 1253.5; and 

(4)   He or she performs full-time work for five days as a juror, or as a witness under subpoena. 

(Cal. Unemp. Ins. Code. § 1252(a), emphasis added.) 

            Thus, an individual may qualify as unemployed where he or she (1) performs no  services and receives no wages; (2) during weeks where he or she performs less than full-time work, if the wages payable to him or her, reduced by the greater of twenty-five dollars ($25.00) or twenty-five percent (25%) of the wages payable, are less than his or her weekly benefit amount; (3) he or she is eligible for benefits under California Unemployment Insurance Code section 1253.5, which regulates unemployment benefits for those unable to work due to physical or mental injury; and (4) he or she has been called to serve as a juror.  In sum, even an individual still working for an employer may seek unemployment insurance benefits.

            There is no definition of full-time work in the Unemployment Insurance Code, but under Title 22 of the California Administrative Code, the EDD has traditionally given the term “full-time employment” its common meaning defined by Webster’s Third New National Dictionary.  Accordingly, it defines “full-time” as “employed for or working the amount of time considered customary or standard.”  Further, for determining unemployment insurance eligibility, full-time work in a week consists of the number of hours considered to be the “standard” or “customary” workweek in a geographic or labor market area. (State of California, Employment Development Department Website <http://www.edd.ca.gov/UIBDG/Total_and_Partial_Unemployment_TPU_5.htm#LegalProvisions>.)  

            If a claimant meets the above requirements for qualifying as “unemployed” but has earnings allocated to a week claimed and is otherwise eligible, the amount of benefits payable is calculated according to the provisions of Section 1279 of the California Unemployment Insurance Code.  Under this section, an individual’s benefits must exceed a deductible in the amount of the greater of twenty-five dollars ($25.00) or twenty-five percent of his wages earned during that week.  (Cal. Unemp. Ins. Code. § 1279, subd. (a).)          

            Thus, under the California Unemployment Insurance Code, an individual is not entitled to receive benefits if his or her earnings when reduced by the greater of twenty-five dollars ($25.00) or twenty-five percent (25%) of his wages payable exceed his or her weekly benefit amount.

B.                 Did You Make a Misrepresentation in Order to Seek Benefits?

            California Unemployment Insurance Code section 1257 disqualifies any individual, who “willfully, for the purpose of obtaining unemployment compensation benefits, either made a false statement or . . . withheld a material fact in order to obtain any unemployment compensation benefits” from receiving unemployment compensation benefits.  Thus, an employee applying for benefits has an obligation to report on the form all current work he or she is performing, whether it is part-time work and/or work for a different employer.  Failure to do so will disqualify the employee from receiving wages.  

C.                 Were You Discharged for Misconduct?

            Another requirement for receiving unemployment insurance benefits requires that the applicant must not have been discharged for misconduct.  (Cal. Unemp. Ins. Code § 1256.)  

            There is a duty to construe the Unemployment Insurance Code “liberally to benefit the unemployed.”  (Gibson v. Unemployment Ins. Appeals Bd. (1973) 9 Cal.3d at 494, 499; see also Cal. Unempl. Ins. Code, § 100 .)  As such, a presumption applies in favor of the claimant, presuming the claimant did not (1) voluntarily leave his work without good cause and/or (2) get discharged by his employer for reasons related to misconduct in connection with his work.  (Cal. Unemp. Ins. Code § 1256.)  In order for an employer to rebut this presumption, the employer must provide written notice setting forth sufficient facts to overcome the presumption by a preponderance of the evidence within ten (10) days of receiving notice of the claim.  (Cerbronics, Inc. v. Unemployment Ins. Appeals Bd. (1984) 152 Cal.App.3d 172, 176; see also Cal. Unemp. Ins. Code § 1256.)  However, the employee may again rebut this presumption.  (Cal. Unemp. Ins. Code § 1256.)  Further, if the employer fails to show by a weight of the evidence that the claims was discharged for misconduct, the claimant will be found eligible for benefits.  (Ibid.)

            “An individual is disqualified for unemployment compensation benefits if the director finds that he . . . [1] left his or her most recent work voluntarily without good cause or [2] has been discharged for misconduct connected with his or her most recent work.”  (Cal. Unemp. Ins. Code § 1256.)  

            1.                  Did You Voluntarily Leave Your Recent Employment?

            To qualify as “discharged” from employment, a claimant must leave his or recent work involuntarily.  (Cal. Unemp. Ins. Code § 1256.)  If you were terminated/discharged, this requirement will be met.  (Ibid.)

            2.                  Were You Discharged for Misconduct?

            “[M]ere negligence, unsatisfactory conduct, failure in good performance as the result of inability or incapacity, inadvertence or ordinary negligence in isolated instances, or good faith errors in judgment or discretion are not to be deemed ‘misconduct’ within the meaning of the statute.”  (Amador v. Unemployment Appeals Bd. (1984) 35 Cal.3d 671, 678, emphasis added [reversing the lower court’s decision and instructing the superior court to order that the claimant receive the unemployment insurance benefits withheld from her for willfully refusing to perform medical procedures she was instructed to perform but felt unqualified to complete].)  Rather, “[t]he term ‘misconduct,’ as used in the code, is limited to ‘conduct evincing such willful or wanton disregard of an employer’s interests.”  (Ibid.)  Such conduct may be found in (1) “deliberate violations or disregard of standards of behavior which the employer has the right to expect of his employee” or (2) “carelessness or negligence of such degree or recurrence as to [a] manifest equal culpability, wrongful intent or evil design, or [b] to show an intentional and substantial disregard of the employer’s interests or of the employer’s duties and obligations to his employer.”  (Ibid, emphasis added.)  In sum, even if an employee’s conduct harms an employer’s interests and justifies the employee’s discharge, the employee will only be disqualified for unemployment insurance benefits where the conduct is willful, wanton, or equally culpable.”  (Amador, supra, 35 Cal.3d at p. 678.)  

            In determining a claimant’s eligibility for unemployment benefits, the employer’s right to terminate the employee will not be questioned, but the fact that the claimant was discharged does not mean he was discharged for misconduct, and is therefore, ineligible to receive unemployment benefits.  (See Cal. Code Regs., tit. 22, § 1256-30, subd. (d).)  Courts will find misconduct connected with the claimant’s most recent work exists only where: 

(1)   the claimant owes a material duty to the employer under the contract of employment;

(2)   there is a substantial breach of that duty;

(3)   the breach is a willful or wanton disregard of that duty; and

(4)   the breach disregards the employer’s interests and injures or tends to injure the employer’s interests.

(Cal. Code Regs., tit. 22, § 1256-30, subd. (b).)

Any employee will likely be determined to owe his or her employer a general duty of care under his or her employment contract as every employee owes an employer such a duty of care.  However, to meet the above factors, the employee’s breach of that duty must also (1) be substantial; (2) in willful or wanton disregard of that duty; and/or or (3) disregard his or her former employer’s interests and/or tend to injure the former employer.

                        a.                   Did you breach a duty owed to your employer?

            Every employee “owes an implicit duty to support and serve the employer’s interests and not to willfully or wantonly engage in acts or statements which evince an attitude of disregard of the employer’s interests.”  (Cal. Code Regs., tit. 22, § 1256-32, subd. (b).)  The “material duties” owed to an employer include “showing up for work, performing work to the best of one’s ability, obeying a reasonable employer order and refraining from fighting or sleeping on the job.”  (California Employment Development Department’s Unemployment Benefit Determination Guide Index, Misconduct MC 5.)  Where a claimant’ actions do not violate a “material duty” to the claimant’s employer, the discharge is not for misconduct.  (Ibid.)  Further, whether a breach of a duty owed to an employer qualifies as “substantial” requires “analysis to determine the severity of the employer’s actions.”  (Comments to Cal. Code Regs., tit. 22, § 1256-30.)  “Where the ordinary negligence of the claimant has resulted in the minimal injury to the employer’s interests, the breach is not substantial unless the claimant has been previously warned or reprimanded about this type of negligence and has the ability and capacity to perform satisfactorily.”  (Ibid.)  “On the other hand, where the employer’s interests have been more severely damaged by the grossly or substantially negligent or deliberate acts of the claimant, misconduct may be found even without previous warnings or reprimands for prior similar acts . . . ”  (Ibid.)  

            In sum, under these standards, a mere mistake only amounts to ordinary negligence and would not qualify as a substantial breach of an employee’s duty owed to his or her former employer, particularly if he or she had never been warned about the act in the past.

                        b.                  If so, was that breach a wanton or willful disregard of your duty to your former employer?

            For an alleged breach to satisfy the third factor, it must be in willful or wanton disregard of any employee’s duty owed to his employer.  (Cal. Code Regs., tit. 22, § 1256-30.)  Such conduct arises where “the claimant knew or should have known that the actions were not in line with the standards of behavior expected as an employee of the employer.”  (Comments to Cal. Code Regs., tit. 22, § 1256-30, emphasis added.)  Where this level of willfulness is missing, the claimant’s actions are not misconduct.  (Ibid.)  As such, the following actions fail to qualify as misconduct because the element of “willfulness” is missing: (1) mere inefficiency; (2) failure to perform well due to inability or incapacity; (3) inadvertence; (4) ordinary negligence in isolated instances; and/or (5) good faith errors of judgment or discretion.  (Ibid.)  Where the employee “knew or should have known that the actions were not in line with the standards of behavior expected as an employee of the employer,” willfulness may be found.  (Comments to Cal. Code Regs., tit. 22, § 1256-30, subd. (b)(3).)  “Examples of unsatisfactory conduct which usually are not misconduct in the absence of prior warnings or reprimands are isolated instances of tardiness or absence, annoying other employees . . . , or the violation of any minor and less significant rule or standard of behavior.”  (Ibid., emphasis added.)

                        c.                   Did the alleged breach harm your employer’s interests or was it in reckless disregard of the employer’s interests?

            As to the final factor, “[t]o constitute a discharge for misconduct, there must be a causal relationship between the individual’s act of misconduct and the discharge.”  (Cal. Code Regs., tit. 22, § 1256-30, subd. (c).) To meet this standard, the claimant’s actions must “injure or tend to injure the employer’s interests.”  (Comments to Cal. Code Regs., tit. 22, § 1256-30, subd. (b)(4).)  “Acts which tend to injure the employer’s interests are acts on the claimant’s part that could possibly cause financial loss, or loss of business, property, or customers, and damage incurred such as disruption of production, of normal lines of communication, or control, or discipline.”  (Ibid.)  “It is sufficient if the claimant’s actions logically and reasonably injure or tend to injure the employer’s interests.”  (Ibid.)

D.                 If You Win, Your Appeal, How Will Your Benefits be Calculated?

            If the administrative law judge determines you were wrongfully denied benefits, you should receive benefits dating from one week after you filed your Notice of Claim (as there is a one week waiting period during which any claimant is ineligible to receive benefits) until, subject to certain exceptions and requirements, the date you obtain replacement employment.  

            1.                  How Does a Vacation Impact My Eligibility for Unemployment Benefits?

            Claimants are not entitled to receive benefits while they are on vacation.  (See, e.g., Int’l Union of United Automobile, Aerospace and Agricultural Implement Workers of America, et al. v. Dept. of Human Resources Dev. (1976) 58 Cal.App.3d 924, 931 [denying unemployment benefits to workers who were laid off and left the State of California for various personal reasons because “[w]hen there is such voluntary abseenteeism . . . the claimant is properly classified as on vacation without pay, and is under no circumstances actively seeking employment” pursuant to California Unemployment Insurance Code sections 1252 and 1253].)  In order to qualify for unemployment insurance benefits, a claimant must actively seek replacement employment.  Because someone on vacation is not considered to be actively seeking employment (particularly, if the claimant is out of state or out of the country and unavailable for interviews), a claimant who takes a vacation while seeking unemployment insurance benefits is not eligible to receive unemployment insurance benefits while on vacation.

            If you think the EDD will not find out about your vacation, think again.  As stated, making a representation in order to obtain unemployment insurance benefits disqualifies you for benefits, likely qualifies as unemployment insurance fraud, and could qualify as a misdemeanor offense.  (California Unemployment Insurance Code § 1257.)  

            2.                  Can I Recover Interest for the Period I Was Not Receiving Benefits While I Appealed the Notice of Determination?

            At the administrative level (e.g, the appeal to the CUIAB), a claimant would not receive interest, (Am. Federation of Labor v. Unemployment Ins. Appeals Bd. (1996) 13 Cal.4th 1021, 1023,) but if the claimant lost at that level and appealed further to the California Superior Court, the claimant would also be entitled to benefits plus interest at the rate of seven percent (7%) on the backpay.  (Cal. Civ. Code section 3287, subd. (a); California Constitution, Article XV, Section 1.) 

            3.                  Determining Benefit Period

            To determine the “benefit period,” a claimant should take the period of unemployment (e.g., date of termination until date of beginning replacement employment) and subtract the one week waiting period as well as any time period during which the claimant was on vacation.  The employment will only be allowed to include weeks during which the claimant filed continuing claim forms.  (Cal. Unempl. Ins. Code section 1326.5.) 

            The EDD uses a Standard Base Period and an Alternative Base Period.  Under the Standard Base Period, the EDD uses the first four of the last five completed calendar quarters prior to the claimant’s filing a Notice of Claim.  For example, if a claimant filed a claim in June 2017, the base period would be January 1, 2016 through December 31, 2016.  If the claimant does not have sufficient wages earned during the Standard Base Period, the Alternate Base Period will be used.

            4.                  Determining Weekly Benefit Amount

            Under the current chart detailing the weekly benefit amount, the weekly benefit amount is based on the claimant’s past earnings.  Weekly benefit amounts for 2017 range from $40.00 to $450.00.  Anyone earning more than $11,674.01 and greater during a quarter ($46,696.04 in a year) will usually receive the maximum weekly benefit amount of $450.00 per week.