Busy human resources (HR) managers will be relieved to know that California has done something to make their job just a little easier. The State of California recently enacted legislation extending the time period to appeal an award or denial of unemployment benefits by the Employment Development Department (EDD). This legislation provides needed additional time to both evaluate the merits of the claim and to weigh the costs and benefits of an appeal.
The bill, known as Senate Bill 1314, was signed into law by Governor Jerry Brown on September 17, 2014. Prior to its enactment, an employer or employee had 20 days from the date of notice of a ruling to seek an appeal or reconsideration of an unemployment benefits determination. SB 1314 will amend California’s Unemployment Insurance Code to extend the time to seek reconsideration or appeal of a benefits ruling from 20 to 30 days. The extended deadline will apply to both appeals of an EDD benefits determination to an administrative law judge, as well as an appeal of an administrative law judge’s ruling to the California Unemployment Insurance Appeals Board. The amendment will take effect on July 1, 2015.
Overview of Unemployment Benefits in California
California’s unemployment insurance system is administered by the EDD. The system is funded by employers through payroll tax payments. The rate of payment for each employer is determined by a multi-factor formula that takes into account the stability of the employer’s workforce, fluctuations in payroll, and whether the employer pays taxes in a timely manner. An employer’s tax contributions are allocated to a reserve fund established in the employer’s name and held by the EDD.
Benefits are generally available to employees who have become unemployed through no fault of their own. For example, persons who are laid off due to a lack of work are typically eligible for unemployment benefits.
Employees who are involuntarily discharged may also be eligible for unemployment benefits, unless they were discharged for “willful misconduct.” Examples of misconduct include insubordination, repeated or unexcused absenteeism or tardiness, dishonest acts, workplace violence, and drug use while on the job.
Discharge for poor performance or for an isolated problematic incident (such as a single tardiness) may not constitute misconduct. Thus, employees who are discharged for these reasons may nevertheless qualify for unemployment benefits.
Unemployment benefits are not generally available for those who voluntarily quit or resigned their employment, unless these persons can show they quit for “good cause.” Examples of good cause include the need to care for sick family members, leaving employment due to unsafe working conditions, and quitting due to unlawful harassment or discrimination.
Benefits are debited from the employer’s reserve fund. To replenish the fund, an employer may experience a higher tax rate as a consequence of a benefits award.
Implications of Senate Bill 1314 and Recommended Best Practices
Many an HR manager, rushing to meet an appeal deadline, has frittered away his or her afternoon at the EDD’s hearing office pursuing an ill-conceived appeal. The new 30-day window beginning in July 2015 will provide HR managers with increased time to conduct a more systematic evaluation of an appeal.
The extended appeal deadline should give employers more time to take several pre-appeal steps to avoid wasting time:
- Become more familiar with the EDD’s determination standards. The EDD has published its standards in a Benefit Determination Guide, which can be found on the EDD’s website. Familiarity with the guide will help the employer avoid wasting time on lost causes such as terminations due to isolated policy violations or for poor performance. The guide identifies each ground for disqualification, lists the criteria, and gives examples of successful and unsuccessful appeals.
- Take the time to organize and assess the award determination. Assign responsibility for a preliminary review and assessment of the initial award determination, as well as for an investigation of potentially important documentary evidence contained in personnel files or in the form of witnesses who can support the employer’s position.
- Select the applicable grounds for disqualification from the Benefit Determination Guide. Line up the evidence to the guide’s criteria. Be objective: If the facts don’t meet the criteria, skip the appeal.
- A few minutes on the phone with employment law counsel may also help save time. An experienced attorney can quickly identify a valid basis for disqualification or frankly advise you to not bother with appealing. He or she can also offer suggestions on how to present admissible evidence at the hearing, how to rebut the employee’s evidence, and what to say when concluding the presentation.
- Calendar the 30-day appeal deadline and assign responsibility for ensuring that the paperwork is submitted in a timely manner. Late appeals are routinely denied.
With a little more time to pursue a methodical approach to EDD appeals, an HR department can more efficiently allocate its busy—and often overtaxed—staff.