CALIFORNIA INSURANCE BENEFITS DURING COVID-19

The California unemployment insurance (UI) program is administered by the California labor laws and was created decades ago as an economic line of defense against unemployment effects. It is designed to offer financial benefits to California employees who become unemployed at no fault of their own by replacing some of the wages they have lost in the past.

The present COVID-19 pandemic has led to a historically unparalleled increase in the level of unemployment insurance (UI) claims filed in California since the crisis started in mid-March. Employees that have been laid off from their job due to the COVID-19 pandemic, or that are unable to work due to childcare or school closures, or that have had their hours or wages reduced by a fraction continues to apply for the unemployment insurance benefits in order to maintain basic necessities while they are temporarily unemployed.

This article will look into how unemployment insurance works, insurance benefits, employees that may be eligible for the unemployment insurance benefits and those that are not, the requirements that must be met, as well as the various federal intervention programs aimed to suppress the effect of the COVID-19 coronavirus pandemic on affected Californians.

NOTE: As you know that things are changing rapidly, the various relief benefits and explanations described in this article are subject to change.  Therefore, this article is simply our best perception as to where things currently stand as of June 10, 2020.

 

HOW THE UNEMPLOYMENT INSURANCE (UI) WORKS

The unemployment insurance system usually provides about 26 weeks of regular insurance benefits to unemployed workers while they actively look for a new job. The program is funded by payroll taxes paid by California employers on the amount of wages they pay to their employees. No tax deductions are made from employees’ wages in California to finance this program.

The tax rate an employer pays is different and influenced by the number of prior unemployment benefit claims that have been filed against the employer. The more claims that are filed against an employer, the higher the tax rate is for that employer. It is therefore important that employers understand the UI system and carefully consider how its benefits affect their employees before they reduce hours, furlough, or layoff.

 

THE CALIFORNIA INSURANCE BENEFITS

While the State provides most of the funding to employees based on the employment taxes collected from California employers, the federal government pays part of the administrative costs for the unemployment insurance program. If an employees’ claim is approved, the amount that the employee can collect per week in insurance benefit ranges between $40 and $450, and it is dependent on their previous earnings.

 

CALIFORNIA UNEMPLOYMENT AND THE EMPLOYMENT DEVELOPMENT DEPARTMENT (“EDD”)

California’s Unemployment and the Employment Development Department (EDD) process unemployment claims and determine employee eligibility. The department has, in the past few weeks recorded over 1.8 million unemployment claims filed, about the same amount as all unemployment claims from the 2008 recession. For employees to be eligible for the regular California UI benefits, the EDD generally requires that the applicant must be:

• ready, willing and able to work
• unemployed without fault; and that their
• past earnings must meet certain minimum thresholds;

 If approved, the Unemployment and the Employment Development Department determines the amount for the weekly benefit based on the applicants’ past earnings, up to a maximum of $450 each week. However, these benefits can be extended by an additional 13 weeks under the Coronavirus Aid, Relief, and Economic Security Act.

 

What Is The Coronavirus Aid, Relief, And Economic Security (CARES) Act?

The Federal CARES Act was signed to law on March 27, 2020, by congress, as a protective measure to provide essential relief to more Californians that are impacted by COVID-19 coronavirus pandemic. It offers emergency aid to eligible businesses, individuals, and families affected by the COVID-19 coronavirus outbreak. The CARES Act, among other provisions, temporarily expands the regular California UI benefits by creating several new programs. These programs include:

 

a)      Pandemic Unemployment Assistance (PUA)

The Pandemic Unemployment Assistance program is an extended eligibility for some employees who traditionally are ineligible for the regular California Unemployment Insurance (UI) benefit, and are unemployed or partially unemployed due to COVID-19 reasons. These include:

• Business owners, Independent contractors, and self-employed employees
• Individuals with a limited work history
• Individuals with false statement penalty weeks on their regular UI claim.
• Individuals who have exhausted all of their regular UI benefits as well as any extended benefits.

 

Eligibility For PUA Benefits

To be eligible for PUA benefits, applicants must either be unemployed, partially unemployed, or unable to work for reasons related to COVID-19, like when:

• The applicant is diagnosed with COVID-19 disease or have its symptoms
• The applicant provides care for their family member diagnosed with COVID-19 disease
• The applicant has a family member who is diagnosed with COVID-19 and has to isolate
• The applicant is unable to get to their workplace due to a forced quarantine, or because the applicant is advised by a health care provider to self-quarantine due to COVID-19
• The applicant is the major caregiver for a child(ren) whose care facility or school is closed because of COVID-19
• The applicant becomes the primary breadwinner because the head of the household died from COVID-19 coronavirus infection
• The applicant was scheduled to start a new job but cannot get to the workplace because of COVID-19
• The applicant had their workplace closed due to COVID-19 pandemic
• The applicant quits their job due to COVID-19
• Meet any additional criteria specified by California EDD.

These applicants may, however, receive below the 39 weeks of PUA benefits if:

• Their unemployment or partial unemployment is no longer due to COVID-19.
• The PUA program is no longer available for weeks of unemployment following December 31, 2020.

 

Exemptions To The PUA Benefits

Applicants that can work from home or on leave and being paid or receiving other paid leave stimulus are not eligible for the PUA benefits, whether or not they meet a category listed above.

 

b)     Pandemic Unemployment Emergency Compensation

Applicants generally collect up to 26 weeks under the regular California UI benefits within a 12-month benefit year. But the Pandemic Unemployment Emergency Compensation (PUEC) offers an extra 13 weeks of insurance benefits to the regular 26 weeks already provided to make a total of 39 weeks coverage. The extended relief is available up till December 31, 2020.

To qualify for a PEUC extension and claim, the applicant must:

• Be fully unemployed or partially unemployed as of March 29, 2020, or after.
• Have used up all the benefits they are due under the California law.
• Not qualify for a regular California UI claim.
• Meet all requirements to be eligible for California UI benefits.

 

c)      Pandemic Unemployment Compensation

Under the PUC provision, employees that qualify for UI benefits will receive an additional $600 benefit every week on top of the regular benefit they are entitled to receive under the California State law. This is approved for all weeks of unemployment starting from weeks available for benefits until July 25, 2020.

Given this federal benefit under CARES Act, a California employee that earns below $54,000 per year, may be eligible for pay weekly via unemployment insurance benefits than if they work reduced hours. Regardless of what their regular benefit is, from April 1 up to December 31, 2020, such an employee:

• may qualify for an extra 13 weeks of benefits according to the Pandemic Emergency Unemployment Compensation. This means the period of benefit is increased from 26 weeks to 39 weeks;
• can receive an additional $600 every week according to the Pandemic Additional Compensation, although it is only available until July 31, 2020.

 

APPLYING FOR THE CALIFORNIA INSURANCE BENEFITS

To receive insurance benefits in California during this COVID-19 pandemic, the employee needs to file a claim with the unemployment insurance program in person, online or by telephone. The fastest and easiest way to apply is online. The employee needs to take the following steps:

• Contact EDD as soon as possible after becoming unemployed.
• The employee will be asked for certain information, such as Social Security Number, mailing address, county of residence, addresses, and if available, their Driver’s License or state-issued ID number.
• Employees will also be asked about the dates and details of their former employer when filing a claim. To ensure your claim is not delayed, make sure you provide correct and complete information.

 

FREQUENTLY ASKED QUESTIONS

 

1. Is there any reduction in UI claims as Californians begin to resume work?

As of June 11, 2020, the proportion of California UI claimants, either not getting their initial benefit payment because their incomes were very high or are receiving partial unemployment insurance benefits increases. While only employees earning less than three-quarters of their previous weekly wages are eligible for partial UI benefits, employees that are earning above that are entirely denied the benefits for that week, resulting in a complicated decision for employees in a doubtful labor market.

2. Can California employees who lost their job and their private insurance find some sort of coverage through the State?

According to a statement made by Peter lee, every California employee is eligible for financial support through the State, except if the employee is an undocumented immigrant.

3. Can California employees collect Employment Insurance (EI) if they self-isolate?

California employees can collect employment insurance if they have to take time off work due to quarantine or self-isolation. They may also be eligible for employment insurance if they are unable to work due to illness caused by the coronavirus.

4. Can an employee apply for disability insurance if they are at home with COVID-19?

An employee that is at home because they need to take care of a family member who has contracted COVID-19 coronavirus can apply for California Paid Family Leave, but it requires medical certification. PFL assistance is presently not a feasible option in other cases. For example, the employee does not currently qualify for PFL if they have to stay home with their kids because the schools are closed.

5. Can Employees Receive Unemployment Insurance Benefits For Reduced Hours? 

If the employer shuts down their operations or reduces their employees’ work hours due to COVID-19, the employees can file a UI claim. The unemployment insurance system under California law exclusively provides partial wage replacement stimulus to employees who have their hours reduced or were laid off without their fault.  Even if an employee is still working part-time, the employee may still be eligible for insurance benefits depending on their earnings and other circumstances. They may even qualify for more money per week if they are furloughed than if they work reduced hours.

6. When should employees affected by COVID-19 apply for insurance benefits?

Employees that are affected by COVID-19 should apply for insurance benefits the moment they realize that their employment contract and income will be impacted by COVID-19. If the employer demanded that an employee should stay home and was not offered any compensation, the employee might be eligible for insurance benefits provided they meet the financial and weekly eligibility conditions.

7. When will I get the additional $600 benefit?

The additional $600 federal insurance stimulus is available for all approved claims, and retroactive payments will be made for the weeks starting March 29 to July 25, 2020. The Unemployment and the Employment Development Department is currently paying the additional fund, and you don’t have to submit any further paperwork to qualify. The EDD will automatically add the fund on top of each week of benefits you are eligible to receive.

8. Do I Have To File A Claim Every Week?

To maintain insurance benefits, applicants are required to file a claim every week. The week starts on Sundays and ends on Saturday. Once an initial claim has been filed, the applicants will have to wait until the following week to submit another weekly claim. Applicants should understand that the weekly claims must be filed albeit their initial claim is still pending.

9. Do I Qualify For The Unemployment Insurance Benefits As A Freelancer?

The PUA program created by the CARES Act covers individuals that are ineligible for the California unemployment insurance benefits or have exhausted their benefits. These include contract workers, self-employed, etc. This program is particularly important for individuals that work in the gig economy, who work largely as freelancers and independent contractors.

FINAL THOUGHT

If you need help filing for the appropriate insurance benefits during the COVID-19 pandemic or you want to make inquiries, the team of attorneys at United Employees Law Group is always at your service. We understand your request is unique and will personalize our service to suit your insurance benefits needs. To schedule an appointment, do not hesitate to contact us through our contact form below.

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