State Disability Insurance and Unemployment Insurance

What is State Disability Insurance?

State Disability Insurance (SDI) is a program of the government of California run by the Employment Development Department (EDD). The concept of SDI is to make sure that people have enough money to get by while they are incapacitated from working due to either an illness or injury, pregnancy and/or bonding with newborn child, or caring for a sick relative. Employees that are incapacitated from work because of an injury caused or aggravated by their work in most cases should be filing for Workers’ Compensation in addition to SDI. Employees that cannot work due to pregnancy should also apply for SDI, but those that cannot work due to caring for a sick relative should apply for Paid Family Leave. The procedures for obtaining these different forms of relief are largely the same and the programs are run by the same state agency, the Employment Development Department (EDD). Most employees in California have a small part of their income taken out of their paychecks for SDI. If a worker becomes incapacitated, State Disability Insurance takes money out of the fund and pays the incapacitated worker a benefit while they are incapacitated from work.

Who is eligible for State Disability Insurance?

In order to be eligible for State Disability Insurance payments you need to meet all of the following requirements. NOTE: Undocumented immigrants can still receive State Disability Insurance if they meet all requirements for it, just like everyone else can. However, undocumented immigrants cannot receive Unemployment Insurance in California and so should not apply for it. There is no obligation to inform the Employment Development Department of one’s immigration status.

1. You must be unable to perform your regular or customary work for at least 8 consecutive days.
2. You must have been either (1.) employed at the time you became disabled or (2.) have been actively looking for work at the time you became disabled.
3. If you were employed at the time you became disabled you must have lost wages because of your disability.
4. You must have earned at least $300 in your 12-month period known as your “base period.” A “base period” for purposes of California State Disability Insurance, is a 12-month period of time prior to the filing of the disability claim, determined by the month in which the disability claim was filed. If you file your claim in January, February, or March, your base period is the 12-month period ending the previous September 30th. If you file your claim in April, May, or June, your base period is the 12-month period ending the previous December 31st. If you file your claim in July, August, or September, your base period is the 12-month period ending the previous March 31st. If you file your claim in October, November, or December, your base period is the 12-month period ending the previous June 30th.
5. You must have been under the care and treatment of a licensed doctor or accredited religious practitioner for the first eight days of your disability. (The beginning date of a claim for State Disability can be pushed later if necessary to meet this requirement.) In order to continue receiving State Disability you must remain under the doctor or religious practitioner’s care and treatment.
6. You must complete a claim form, which can be accessed on the Employment Development Department Website. The claim form has 4 pages. Complete the first two pages and then give the form to your medical provider to fill out the last two pages. Once the application is complete, make a copy of it and submit the original. If you’re applying for Paid Family Leave, which is like State Disability except that you’re not claiming that you’re disabled, you’re claiming that a loved one that you need to take care of is, then there’s a different form for that called the DE 2501 F. If there are no problems with your claim you should start receiving your checks in the next two weeks.
7. The claim form should show that you have been disabled for at least eight days. IMPORTANT: If you file your claim for State Disability Insurance after being disabled for more than 49 days your claim can be denied as a matter of law for having been filed too late. If you do need to file for State Disability after having been disabled for more than 49 days you should include a letter explaining why you couldn’t file within 49 days of becoming disabled.
8. Even if you meet all the requirements above, you can still be denied State Disability if any one of the following apply in your case.
   1. If you are receiving Workers’ Compensation Payments at a weekly rate equal to or greater than your weekly State Disability Insurance Rate
   2. If you are claiming or receiving Unemployment Insurance or Paid Family Leave benefits at the same time.
   3. If your income from work has not been reduced
   4. If you became disabled while committing a crime resulting in a felony conviction
   5. If you do not show up for an Independent Medical Examination when requested by the Employment Development Department to do so.

How do I apply for State Disability Insurance Benefits?

Go to the Employment Development Department’s Website here and either fill out the online application or request a paper copy. The application is four pages long. You should fill out the first two pages of the application, otherwise known as DE 2501, and then give the half-filled out application to your medical provider. Ask them to fill out the remaining two pages, otherwise known as DE 2502. When you have a completed and signed application make a copy of it and mail the original to the Disability Insurance Office nearest to where you live. Do this no earlier than 9 days after you become disabled but no later than 49 days after you become disabled. A list of State Disability Insurance Offices is listed below:

How are the amount of SDI benefits calculated?

In most cases, SDI takes all the wages that were earned over a worker’s “base period” as described above, then divides up the base period into four separate quarters. SDI then takes the quarter where you were earning the most money and divides all the money you earned in that quarter by 13, because there are roughly 13 weeks in a quarter. Then SDI takes that number and pays 55% of it every week.
So for example, Joan made $9,250 the first quarter of her base period, $9,750 the second quarter, $10,250 the third quarter, and $10,750 the fourth quarter. SDI takes the quarter where she earned the most money ($10,750) and divides that by 13. Here we get $826.93. ($10,750/13 = $826.93) SDI then pays 55% of that figure rounded up to the nearest dollar or $455 ($826.93 x 0.55 = $454.82, $454.82 rounds up to $455.) In this example, Joan’s weekly SDI benefit would be $455 for each week she is eligible for SDI.

There are some situations where an SDI claimant can utilize a different quarter’s earnings that is not in their base period in order to obtain a higher highest earnings quarter and thus a higher weekly SDI payment. These situations include:

1. Not working because of a labor dispute
2. Receiving Workers’ Compensation Payments
3. Unemployment for more than 60 days during a quarter
4. Military Service

How long do the State Disability Benefits Last?

SDI benefits generally run until the disability termination date the medical provider lists on the original application. Your medical provider can amend your termination date to change it to a later date. The period of disability can be up to 52 weeks long. If you return to work part-time or collect other income while you are disabled or partially disabled you can collect partial payments for longer than the 52 week maximum. There may be times when you are asked to fill out a “continued claim certification” form and return it to the Employment Development Department in order to continue receiving benefits. Although some answers on the Continued Claim Certification form could reduce your State Disability Benefits if you don’t answer truthfully there are multiple very bad things that could happen if you don’t.

• You could be criminally prosecuted for insurance fraud.
• You could be found liable for an “overpayment” if SDI thinks it paid you too much and wants some of the money back.

Answers that may result in your benefits being reduced include part-time work, commissions, bonuses, holiday pay, sick time pay, military pay, etc.

PAID FAMILY LEAVE

Eligibility

Eligibility for Paid Family Leave is determined just like State Disability except that instead of applying based on one’s own incapacity to work some or all jobs, it’s applying based on one of the following reasons.

1. To provide necessary care for a seriously ill parent, child, spouse, or registered domestic partner.
2. To bond with your new child or the new child or your spouse or registered domestic partner.
3. To bond with your child in connection with your adoption of the child or the child’s foster care placement with you or your spouse or registered domestic partner.

Even if you meet one of the grounds listed above you can still be found ineligible for Paid Family Leave if:

1. You are receiving Workers’ Compensation payments that are equal to or greater than what your Paid Family Leave would be.
2. You are claiming or receiving State Disability Insurance or Unemployment Insurance benefits at the same time.
3. The sick relative that is the basis for your application does not attend an independent medical review when requested to do so.

How to apply for Paid Family Leave

You can apply for Paid Family Leave at the Employment Development Department’s Website or you can order an application for Paid Family Leave, otherwise known as form DE 2501 F from the Employment Development Department. You will need to fill out your portion of the application and have your loved one’s medical provider fill out their portion. Both you and your medical provider will need to sign the application under penalty of perjury. When you have a completed application make a copy of it and mail the original to the Disability Insurance Office nearest to your home.

Pregnancy

An employee can also generally apply for State Disability Insurance based on a pregnancy. For most pregnancies, the disability period begins four-weeks before the expected due date and ends six-weeks after the date of delivery.

UNEMPLOYMENT INSURANCE

What is Unemployment Insurance?

It is the author’s opinion that Unemployment Insurance (UI) should be renamed Unemployment or Underemployment Insurance because there is a common misconception that performing any sort of work renders someone ineligible for UI Payments and that is not the case. Unemployment insurance is a program of the Employment Development Department, which is a division of the State Government of California. The idea of it is that as people are working small amounts of money are taken out of their paychecks and put into the Unemployment Insurance fund. If they lose their job, either because they are laid-off or terminated for some reason other than misconduct on the job, or are looking for work but cannot find it, then money comes out of that fund to pay that person very modest weekly unemployment insurance benefit.

Who is eligible for Unemployment Insurance?

To be eligible for Unemployment Insurance you must meet all of the following requirements:

1. Have enough wages during your “base period” to qualify
2. Be totally or partially unemployed
3. Be able to work, physically and otherwise (note, undocumented immigrants and other persons who cannot work legally in the United States are unable to meet this requirement for Unemployment Insurance Benefits and so should not apply for Unemployment Insurance Benefits.)
4. Be actively looking for work
5. Be available for work which means ready and willing to accept work
6. If you quit your job, you must have quit your job for a good reason, and if you were terminated, you must not have been terminated because of misconduct at work.

Each of these requirements will be examined individually.

Requirement 1: Sufficient wages during your “base period”

In order to be eligible for Unemployment Insurance, you must have earned at least $1,300.00 in any one quarter of your “base period” or have earned at least $900 in any one-quarter of your base period AND have earned at least 125% of the amount you earned in your quarter with the highest earnings over the entire course of your base period.
Most wages earned count towards category but there are some exceptions. These exceptions include but are not limited to:

1. Wages earned by employees of the Federal Government
2. Wages earned by Domestic workers who earn less than $1,000 per 3-month period.
3. Wages earned by employees of churches and other primarily religious organizations
4. Wages earned by students employed by schools, colleges, and universities.

For purposes of Unemployment Insurance, a potential claimant’s “base period” can be found using the following chart:

If you do not have sufficient earnings in your base period the EDD can look to find enough earnings in an alternate base period. Alternate base periods can be found using the following chart:

Requirement 2: Be totally or partially unemployed

In order to be “unemployed” for purposes of being eligible for Unemployment Insurance Payments, a claimant has to meet one, but only one, of the following requirements for every week Unemployment Insurance Benefits are claimed:

1. In any particular week, you did not perform any services for which wages were payable.
2. In any particular week, you worked less than 40 hours, if the wages payable to you for the week when reduced by either $25.00 or 25% of the wages payable, whichever is greater, do not exceed what you would otherwise get from Unemployment. (This is a provision for people who are underemployed.)
3. In any particular week you performed full-time work for five days as a juror, or as a witness under subpoena.

Requirement 3: Be able to work, physically or otherwise

In order to receive unemployment benefits you must be physically and mentally capable of performing your “usual and customary occupation.” If you are too injured or sick to perform your usual and customary occupation or if you are not legally allowed to work you will not meet this requirement. “Customary occupation” for purposes of UI generally means a similar job to the one you had last, or some job you held recently, or some other job for which you are reasonably suited for given your health, age, prior training, experience, length of commute, and length of unemployment. If you were too injured or ill to work for part of a week that you would otherwise be qualified to work for you can still receive UI for those days during that week that you were able to work and for weeks in the future where you will be eligible.

Requirement 4: Be actively looking for work

In order to be eligible for Unemployment Insurance Benefits you must prove that you are actively looking for work. I recommend taking the following steps to ensure that you can prove that you are actively looking for work.

Register with CalJOBS and maintain an active resume with them. To register with CalJOBS complete the following the steps.

1. Go to the CalJOBS website here
2. In the “job seeker” box select “register”.
3. Follow the instructions listed on that webpage.

Search for work

In order to be eligible for UI you must actively search for work each week that you are otherwise eligible for UI. You must search for work that is appropriate considering your skills and capabilities and the labor market. You must continue to look for work and contact three employers each week in order to be eligible that week for UI.

It is a good idea to keep a record of your job search. I recommend getting a spiral-bound notebook to document the steps you have taken in your job search. Your notebook should contain names of employers where you have applied, if possible a contact person there that can verify that you applied, the date you applied, job announcements that you responded to, and the type of work that you applied for.

Below are some suggestions that could help someone find work:

• Respond to “help wanted” ads in the newspapers, magazines, and on the internet.
• Contact prior employers
• Tell friends and relatives that you are looking for work
• Check trade books for your occupation
• Develop a resume and take a paper copy of it with you to any job interviews.
• Contact employers who may have jobs in your field.

There are certain situations where EDD will waive the job search requirement. These situations include but are not limited to:

1. A formal job offer where the work will start within a reasonable period of time.
2. If you’ve been laid off for a period expected to last less than 30 days.
3. If you’re employed seasonally but seasonally unemployed, there is little chance of finding other work during the off-season, and you do not have the necessary job qualifications for other work that is available.

Requirement 5: Be available for work

In order to be eligible for UI you must not be too ill or injured to work. You must be able to legally work in the United States and you must not be on vacation or otherwise unavailable to accept work. Also, you must not unreasonably refuse work if offered.
Acceptable reasons for refusing work include but are not limited to:

1. The job is vacant because of a labor dispute.
2. The cost of commuting would be more than 50% of the total wages.
3. The wages, hours, and/or working conditions are substantially worse than those that are common in that occupation in that geographic area.
4. The potential employer does not have Workers’ Compensation Insurance.
5. The job offered does not utilize your job skills and you would lose proficiency in your chosen field.
6. At the present time you are physically unable to perform the essential job duties with or without reasonable accommodation.

Requirement 6: If you quit your job, you must have quit your job for a good reason, and if you were terminated, you must not have been terminated because of misconduct at work.

This will be divided into two sections:

1. Unemployment Benefits for former employees that have been terminated.
2. Unemployment Benefits for former employees that quit their jobs

Unemployment Insurance Benefits for former employees that have been terminated.

Just because an employee has been terminated does not mean that they will not be eligible for Unemployment Insurance Payments. Unemployment Insurance Payments can be denied on the grounds that the employee was terminated for “misconduct” but in order to prove that an employee was terminated for misconduct an employer must prove that all of the following four points are more likely than not to have occurred:

1. That the claimant owed a material duty to the employer.
   

   Common “material duties” for purposes of UI include showing up for work on time, not leaving early, performing the work to the best of one’s capability or reasonably close to the best of one’s capability, carrying out reasonable instructions from the employer, and refraining from fighting or other offensive conduct on the job. If the reason you were terminated was unrelated to a “material duty” to your employer, you should not be denied UI based on termination for misconduct.

2. That there was a substantial failure to carry out the duty.
   

   This requires an analysis of the severity of the claimant’s actions. If the employee was terminated for an action or omission that was a result of ordinary negligence, such as a janitor forgetting to empty a wastebasket or dust off a desk, that will not ordinarily result in a finding of termination for misconduct unless there were repeated warnings to the claimant that those tasks were part of his or her job duties. Also, the claimant must have had both the ability and the capacity to carry out the job duties satisfactorily.

3. The failure to carry out the duty was willful or wanton.
   

   This means that the employee either knew or reasonably should have known that these actions or omissions were outside of the employer’s reasonable expectations for the employee in their position. However if the failure to carry out the duty was a result of the employee just being inefficient, or if the employee didn’t carry out the duty well due to an incapacity or inability to perform it well, or if you were just in advertent but not grossly negligent, or if you were ordinarily negligent in isolated instances, or if you simply made good faith errors in judgment or discretion then you should able be denied UI on the grounds of Termination for Misconduct because your employer should not be able to prove this aspect of their defense.
   

4. The employee’s failure to carry out the duty tended to harm the business interests of the employer.
   

   This means that the actions or omissions that the employee was terminated for could have possibly caused financial loss, loss of business, property, customers, etc. The employer does not have to actually sustain any financial loss.

If the employer is successful in proving all four points the Unemployment Insurance Claim can be denied on the basis that the claimant was “terminated for misconduct.” However, keep in mind that the misconduct does have to be pretty bad and understandable acts of ordinary negligence generally will not preclude a claimant from receiving UI. This is sometimes a contentious issue in claims for UI. For more information about termination for misconduct, visit the Employment Development Department’s website here.

Unemployment Insurance Benefits where the employee voluntarily left their job

UI Claimants who have left their jobs voluntarily cannot collect UI benefits unless they left their jobs for good cause. EDD assumes that UI Claimants that have left their jobs voluntarily left with good cause. However, it is possible for employers to rebut this presumption if the employers produce evidence, such as testimony, that the employee left for good cause.

In order to deny a claimant UI on the bases that they left their job voluntarily without good cause the employer must prove that it is more likely than not that the claimant left their most recent work voluntarily and without good cause.
Some examples of good cause to leave a job for purposes of receiving UI are

1. Being unlawfully discriminated against and denied opportunities for advancement at work
2. Being sexually harassed at work
3. An unreasonably difficult commute to and from a particular job
4. A substantial reduction in pay or hours
5. A compelling family necessity
6. If the work involves an undue risk of injury or illness
7. Leaving for other work based on a definite job offer

Usually, in order to be eligible for UI a claimant has to show that if there was one of these problems, that they complained about this problem and took reasonable steps to try to fix this problem before they left. Also, sometimes it is possible for a terminated employee to negotiate a “quit in lieu of discharge” so that they are better positioned to seek new work. This can help workers avoid getting a termination on their employment history but maintain their eligibility to collect Unemployment.

How to apply for Unemployment Insurance

You do not need to visit an office of the Employment Development Department in order to apply for Unemployment Insurance. You can apply for UI in three different ways. However, for a faster response from EDD it is recommended that you apply online. The three different ways are:

1. To apply over the internet. You can do that here. (this is usually the fastest and easiest way)
2. To fill out a paper application and fax or mail it in. You can fill-out an application here (link to email-attached unemployment application form) and then print it out and either fax it in or mail it in.
3. You can apply by phone interview at 1-800-300-5616.

Typically, after an application for Unemployment Insurance Benefits is properly submitted a telephone interview will be scheduled with the claimant. If that happens, you want to be available for the telephone interview and answer all questions truthfully. If you qualify for Unemployment Insurance you should begin receiving checks within two weeks.

Calculating the amount of the Unemployment Insurance Benefit

The amount of weekly UI benefits can range from $40.00/week to $450.00/week. The amount of an UI claimant’s weekly benefits is determined by taking the quarter in the claimant’s base period with the highest earnings and applying the following chart. A quarter for these purposes is one of the four 3-month quarters in the base period. A base period can be found using the graph below:

Then, EDD takes the earnings from the highest quarter in your base period and divides that number by 26. EDD then takes the number that results and rounds it up to the next whole dollar amount. That number is the claimant’s weekly benefit amount unless the claimant is either a minimum or maximum earner. Unemployment has a minimum benefit of $40/week and a maximum benefit of $450/week. So if the number that results after a claimant’s earnings from their highest-earnings quarter in their base period is divided by 26 is less than 40, the UI benefits that that person will receive will be $40.00/week. On the other hand if after dividing the earnings from the highest-earnings in a base period by 26, that number is greater than 450, that person will still only receive $450.00/week.
More detailed information is available here.

How to continue receiving unemployment insurance once you are already receiving them

If your claim has been approved, you should receive a check in the mail for Unemployment Insurance Benefits every two weeks from the Employment Development Department. Along with the check you should also receive a form for certification of continuing Unemployment Insurance Benefits. In order to continue receiving UI you will need to fill out the form and return it to EDD. If you’ve earned money for a week that the form asks you about, your benefits will be reduced by 75% of the money that you earned that week. However, it is vital that you report these earnings because if you did earn money and you don’t report it you can be criminally prosecuted for Unemployment Insurance Fraud and can end up owing the Employment Development Department an “overpayment” if they say and can prove that they paid you too much. Worse, this “overpayment” can have hefty penalties attached to it so you can end up paying a lot.

How long can I receive Unemployment Insurance Benefits For?

In most cases, you can receive up to 26 weeks of Unemployment Insurance Benefits for 26 weeks of a “benefit year.” A benefit year is a period of one year beginning the date your claim for UI was first filed. In order to be eligible for the full 26 weeks of Unemployment Insurance you will need to demonstrate earnings during your entire base period of an amount equal to or greater than 52 weeks of your UI rate.
In rare circumstances the 26 weeks of Unemployment Insurance can be extended for situations with a high unemployment rate, a natural disaster, lack of jobs due to foreign imports, or similar circumstances which could affect a claimant’s ability to find work.

FAQ: Should I apply for Unemployment or State Disability?

You cannot legally receive both Unemployment and State Disability at the same time. State Disability pays more, so if your doctor certifies you for State Disability and his findings seem consistent with your symptoms from your injury and you otherwise qualify for State Disability you should apply for State Disability Insurance. If you do not qualify for State Disability but do qualify for Unemployment then you should file for Unemployment.

FAQ: I was injured at work and then fired shortly afterwards. What should I do?

You should probably talk to an attorney. If your injury requires medical treatment beyond first aid, could incapacitate you from work for longer than three days, and/or could leave you with some permanent residual impairment, you may want to consider retaining a quality Workers’ Compensation attorney to file a Workers’ Compensation claim on your behalf. Additionally, you might want to consult with a quality Employment Attorney to consider filing an action for discrimination against disabled persons. After all, there was no reason why you’re employer had to terminate you, they should have left you on the books to give you an opportunity to heal and they should have provided you with the necessary forms to file for all Workers’ Compensation payments and medical treatment to which you are lawfully entitled.