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The Coronavirus Outbreak and California Unemployment Benefits  

The evolving COVID-19 crisis is driving many employers to the difficult decisions of reducing hours or laying off employees.

California has in turn relaxed the unemployment insurance (UI) access and qualification standards significantly. This includes the governor’s elimination of the usual seven-day waiting period upon application. Further, if the employer would offer to rehire within the coming two weeks if conditions permitted, the workers need not show the EDD that they are actively looking for other work in order to qualify. Eligibility still requires employees to remain able, available and ready to work. See, EDD – Coronavirus 2019 (COVID-19) and EDD Unemployment Eligibility.

An employer who knows layoffs will only last two weeks or less can offer employees special short-term “reduced earnings” benefits by issuing an Form DE 2063  to each affected worker. See also, that form’s completion instructions. To be eligible, the employee’s gross earnings after deducting the first $25 or 25% of the total earnings must be less than her/his weekly UI benefit amount. If the employee is then not reinstated within those two weeks, he or she would have to apply regularly for UI benefits.

California employers seeking a flexible alternative to layoffs may apply for the EDD’s Work Sharing Program (WPS), permitting management to retain their workers by reducing hours and partially offsetting the reduced wages with UI benefits.

The WPS guide permits the employer to determine which employees will participate and to  rotate who shall have reduced hours and wages each week. The employer can also determine which week(s) will have such hour and wage reductions.

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For further information on unemployment insurance benefits or any other Coronavirus workplace concerns, please contact Tim BowlesCindy Bamforth or Helena Kobrin.

Cindy Bamforth

March 26, 2020