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Eligibility: Part 2

Reason for Job Loss

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Once a valid claim is established the claimant is eligible to receive benefits unless the claimant or someone else raises an issue. An "issue" is anything that could potentially stop payment. Each issue must be decided at a determination interview and the decision documented.

This section will introduce the concepts used by the Employment Development Department (EDD) to determine whether the reason the claimant lost their job raises an issue. Other eligibility issues will be discussed in a separate article.

When an individual quits or is fired from a job the EDD calls this a job separation. A separation occurs when there is a permanent severance of the employment relationship.

Basic Eligibility Concepts

Out of work through no fault of one's own

To be eligible for benefits claimants must be out of work through no fault of their own. This means the claimant was not responsible for losing the job.

A lack of work occurs when the work the claimant was hired to do ends and there is no more work available. When there is a lack of work there is no fault on the part of the claimant and the claimant is eligible for unemployment insurance (if there are no other issues, of course).

In other words, getting "laid off" makes one eligible, but getting fired or quitting raises issues.

Determining Fault

When a claimant quits or is discharged (fired) from a job the EDD must determine if the claimant is at fault. If he is at fault he would not be eligible for benefits.

There are three basic concepts the EDD uses to determine fault in employment terminations (separations):

  • Good Cause
  • Moving Party
  • Burden of Proof
Good Cause

Good cause is broadly defined as a real and compelling reason for an action. Good cause must be shown whenever a claimant quits a job (see Voluntary Quit), refuses an offer of suitable work, or places restrictions on their availability to accept work. If the claimant fails to show good cause for certain events, (or if an employer does show good cause for firing an employee,) they will not be eligible for benefits. Good cause is defined in Title 22 Section, 1256-3(b) California Code of Regulations and discussed on the EDD web site here.

Moving Party

The moving party is the one who caused the termination of the employment relationship. Whenever the reason for the job loss is a quit or discharge (fired), the EDD must determine who ultimately caused it. This is necessary to determine who has the burden of proof to establish good cause for the termination of the employment.

Burden of Proof

Burden of proof refers to the responsibility to establish good cause for the end of the employment relationship. The responsibility (burden) belongs to the moving party. This means that the person who initiated the separation must show he had good cause to end the employment relationship.

In a voluntary quit the burden of proof is on the claimant to show he had good cause to quit or he would not be eligible for benefits (see Voluntary Quit below). In a discharge the employer must show misconduct on the claimant's part or the claimant would be eligible for benefits (see Misconduct below).

Types of Separations

Misconduct

Misconduct occurs when work is still available but because of the actions of the employee the employer decides to terminate the employment relationship. When an employee is discharged (fired or terminated) the employer has the burden of proof to show there was misconduct on the employee's part. Failure to do so would result in the claimant being eligible for benefits.

When the EDD decides against the employer in these types of cases, the employer's unemployment insurance taxes may be subject to increase. Therefore, the employer has a financial incentive to prove misconduct to the EDD's satisfaction.

The following elements must be met to establish employee misconduct:

  • The claimant owes a duty to the employer
  • There is a substantial breach of that duty
  • The breach is a willful disregard of that duty
  • The breach injures the employer's interests

When all of these are present the claimant would not be eligible for benefits.

The EDD will find there was misconduct if the claimant's action or inaction substantially negatively affected the employer's interests and the claimant knew or reasonably should have known it would do so.

Misconduct is defined in Title 22 California Code of Regulations, Section 1256-30(b) and discussed on the EDD web site here.

Voluntary Quit

Voluntary quits occur when the employer has work available but the employee decides to leave the work. When a claimant quits a job it is the claimant's responsibility (burden) to establish he had good cause to quit. Failure of the claimant to do so will result in a denial of benefits (disqualification).

To be eligible a claimant must establish that he:

  • Left work for reasons that were real, substantial and compelling
  • Attempted to change the situation or circumstances before quitting
  • Acted the same as any reasonable person who wanted to keep the job would have done under the same circumstances

Unless all these are present the claimant would not be eligible for benefits.

The claimant will have to show that the circumstances that made him leave were real and that any other reasonable person who wanted to keep working at the job would also have had no choice but to quit. In addition, in order to be eligible for benefits, the claimant would have to demonstrate that he made an attempt to change (improve or resolve) the work situation before quitting.

Voluntary quit is defined in Title 22 California Code of Regulations, Section 1256-3 and explained further at the EDD site here.

Strike or Lockout

When an individual is out of work due to a strike or lockout there is no severance (separation) of the employment relationship. These individuals expect to return to work at a later date when circumstances change. There is an issue that must be decided but it is not a separation issue. Strikes are explained at the EDD site here. Basically, the striking employees would have to satisfy the courts that the loss of work was the fault of the employer, which is a complex process outside the scope of this article.

Length of Disqualification

When a claimant is disqualified for either a voluntary quit or a discharge the disqualification starts the Sunday of the week in which the employment ended. The disqualification remains in effect until the claimant returns to work and earns at least five times their weekly benefit amount, then is unemployed through no fault of their own, and then contacts the EDD to reopen their claim.