Unemployment Insurance
HollyG
9 Posts
Does anyone know if employees can collect unemployment insurance from the State during shutdown? I've also heard that unemployment can be collected in job sharing situations??
Comments
As a cost saving measure, my company implemented several mandatory shut down weeks thorughout the course of 18 months. (Eight weeks to be exact, ouch!)
One of concerns raised was unemployment availability during shutdowns. When the higher "powers that be" in the company decided on the shutdowns, they hadn't considered any unemployment issues that would arise. To their way of thinking unemployment was only for the "unemployed", and since are employees were still actively employed by the company, then of course they wouldn't qualify for UI, right? Wrong, but of course that was only addressed after it was brought to their attention AFTER the decision had already been made and announced. And believe me, they wouldn't believe it until I had provided them with MUCH documentation and confirmation from the states in question.
We are based in MA, but do have employees working in CA. According to the CA unemployment statutes, in order to qualify for unemployment, an employee must satisfy an earnings test and an eligibilty test. Assuming your employees earned enough over the course of the base period, they would then need to pass the eligibilty test. In order to be entitled to benefits under the eligibility rules, an individual must be:
Out of work due to no fault of their own
Physically able to work
Actively seeking work
Ready to accept work
If it is the employer's choice to have the shutdown, and the employee is otherwise ready, available, and able to work; then yes, the employee would qualify to receive unemployment insurance for that period. However, many states have a waiting period before unemployment can kick in. According to the California statutes, "(d) He has been unemployed for a waiting period of one week as defined in Section 1254, unless this waiting period has been waived pursuant to Section 8571 of the Government Code."
If your company is only planning on a one week shutdown during the year, then your employees could file a claim for unemployment, and would be eligible, but would not receive any benefits because the "temporary unemployment period", i.e. the shutdown, would last only a week and would count towards the waiting period.
If, however, your company was to have more than one week long shutdown in the course of a 52 week period, the employee could file the claim during the first shutdown week, not receive any benefits, but could then re-open the claim during a subsequent shutdown week and receive benefits.
Here in Massachusetts, we had a one week waiting period as well, but the governor rescinded it late last year as a result of the increasing unemployment rate in the state. Our employees could then go and file a claim for the one week, and received a UI check. Then, during the next shutdown the employee would go and re-open the claim, and get another check, and so on.
Another interesting note about MA, is that any vacation time an employee is paid during a shutdown week counts against any unemployment earnings he/she would have been paid, but only if they are constructively paid, not just if the option is there.
If an employee were to be paid vacation time of $600/week, but the cap on unemployment is $512, he/she would be ineligible to receive any UI payments. Just having the option of receiving vacation time doesn't automatically count against UI benefits, only if the employee is actually paid. An employee could then choose to save their vacation time, apply for unemployment, and receive benefits from the state while they save their vacation hours.
Granted, most of our employees are engineers, so UI benefits are only a fraction of what they would earn with their vacation pay, but I wonder in other industries/companies, if employees were aware of this and used it to their advantage?