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California Unemployment Update Partial U.I. Benefits Options

EverythingHR Staff | 04/10/2020 | Blog, Featured

On April 7th, the California EDD announced that it will temporarily not require use of the “Notice of Reduced Earnings” (DE 2063), thereby simplifying the UI claims process for employees working reduced schedules. 

The partial unemployment benefits option is a popular approach for employers under the current circumstances, as it allows the employer to retain valuable employees, while still reducing some costs.  Simultaneously, it provides many employees with additional income (through the partial UI benefit) to supplement their remaining wages. 

A few key points employers should keep in mind when considering or communicating partial unemployment as a component of reduced work schedules:

  • Employers can establish a Partial Benefits Program, through which employees may be eligible for unemployment based on their actual decrease in hours and wages.  Information on this program can be found HERE.  Remember that the DE 2063 is not currently required.
  • Work Sharing, referred to in the CARES Act as “Short-Time Compensation,” is a form of partial unemployment compensation.  It is set up by the employer through the state and often provides a greater UI payout to the employee.  There are numerous benefits to the program, although there are very specific qualifiers and some administrative burdens that the employer must address. Information on the CA program can be found HERE.  About half of all states have a Work Sharing program, and the Federal government will be subsidizing the states, and is encouraging all states to establish a Work Sharing program.
  • It is extremely difficult to advise an employee as to how much they might be eligible for through either Partial Benefits program.  The EDD website has calculators and, in the end, the state will make the determination.

 

Overall, employers should carefully consider their options regarding Partial Benefits programs.  There is no standard answer as to what might work best. We do know, however, that either of these programs provide a better option than layoffs – whenever possible

Below is the notice issued by the CA EDD on the temporary waiver of the DE 2063:

Due to the sudden and immense impact of the COVID-19 pandemic on businesses and workers and the unprecedented demand for UI benefits, if you are currently not issuing the Notice of Reduced Earnings (DE 2063) (PDF) or Notice of Reduced Earnings (DE 2063F) (PDF) to your employees, do not issue these forms to your employees to receive UI benefits.

Due to the COVID-19 pandemic, the EDD is not requiring workers who are working reduced hours or are completely laid off to seek work. There is no need to participate in the Partials program at this time. The primary benefit of previously participating in this program was to retain your skilled and trained workforce because they were not required to look for work. The EDD recommends you take the following steps:

  • Do not issue the Notice of Reduced Earnings (DE 2063) (PDF).
  • Inform your working or laid off employees to apply for UI benefits online for the fastest way to file.
  • Inform your employees that after they apply for UI benefits online and their claim is processed, to certify for continued benefits for every two-week period by logging into their UI Online account for the fastest way to certify and receive their benefit payments.

NOTE: If you have been participating in the Partials program by issuing the Notice of Reduced Earnings (DE 2063) (PDF) to your employees, we will separately work with you to have your employees switch to regular UI continued claim forms. This will ease the burden on you of having to complete the employer portion of the paper DE 2063 form and allow your employees to certify for continued benefit online.

Disclaimer: The information presented in this email is provided for informational purposes only and does not constitute as legal advice.