What is UI? Do I have a say in how claims are processed?



Posted: Wednesday, April 01, 2009

by
MMC, Inc.

The federal Unemployment Insurance Program (UI) provides weekly benefit payments for workers who lose their job through no fault of their own and are attempting to re-enter the workforce. Eligibility for benefits requires that the claimant be able to work, be seeking work, and be willing to accept suitable work. In California, the UI program is managed by the Employment Development Department (EDD).

The benefit amount is calculated on wages paid during a 12-month period, called the "Base Period." The Base Period is defined as the first four of the last five calendar quarters the claimant-employee completed during their employment, prior to filing for benefits. The quarter with the highest amount of wages during the Base Period will determine the weekly benefit amount. In California, the minimum weekly benefit amount is $40 and the maximum is $450. Generally, benefits may be collected for a maximum of 26 weeks or 1/3 of the total base period wages, whichever is less.

So, how are unemployment insurance claims investigated and processed by the EDD? To determine whether a claimant-employee is eligible for benefits, the EDD engages in a fact gathering of sorts on whether the job loss was based on no fault of the claimant-employee. Documentation of performance issues is critical. If employment was terminated because of a vague "he/she did not perform their job satisfactorily," the EDD will interpret that the claimant-employee did not possess the training or skills necessary to perform the job and they will be awarded UI benefits. Under this scenario, EDD will award benefits and provide supporting explanation to the charged employer of: "The reasons for discharge do not meet the definition of misconduct connected with the work."

In a nutshell the UI process is:

If the decision is objected to by either the claimant-employee or the employer:

In conclusion, employers do have a say in how claims are investigated and processed. Terminating employees must be managed through sufficient documentation. Additionally, there is an often overlooked benefit to managing UI claims. Costs can be substantially minimized when claims are kept to a minimum. The cost of UI is generally based on the number of claims that impact an employer's tax account. Helpful tips for managing costs include answering all EDD claims in a timely manner, appealing all unfavorable rulings, and reviewing costs regularly and carefully to avoid errors.

Michele O'Donnell joined the MMC team in January 2007 and currently leads MMC's elite team of HR Consultants. Ms. O'Donnell has been involved in the Human Resources industry for more than 14 years, bringing vast training and management experience to the MMC leadership ranks. Her experience spans the broad scope of labor law, regulatory compliance and HR Best Practices, drawn from her rich experience as Director of HR for several firms throughout her career. She currently works to ensure that MMC's consultants forge long lasting relationships with our clients, fostered in exceptional service and unsurpassed HR expertise.  Ms. O'Donnell earned her baccalaureate degree in Business Administration from Auburn University before receiving her Masters degree in Human Resource Management from Troy State University. Learn more about MMC’s comprehensive HR services at http://www.mmchr.com

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