Can you collect unemployment if your employer goes out of business in California?

That's actually reassuring to hear. Do you know if California EDD has any way to verify wages if the employer wasn't reporting them properly? Like can I just submit my pay stubs as proof?

same thing happened at my old job, employer went MIA and EDD still processed my claim fine. took a few extra weeks but they figured it out

You can submit pay stubs as supporting documentation but California EDD will still try to contact the employer through whatever contact info they have on file. If nothing comes back they typically proceed based on the documentation you provide. The process might just take a bit longer than usual.

Oh that's a really good tip about the SSA earnings statement, I never would have thought of that. Going to check that right now actually.

this is so important!! my former employer underpaid into the system for years and i ended up with a way lower benefit amount than i deserved. document EVERYTHING

wait so if the employer wasn't paying into unemployment insurance at all does the employee just get nothing?? that seems so unfair

Thank you for this, this is exactly the kind of real experience I needed to hear. I've been dreading calling EDD because every time I tried I just get the 'high call volume' message and get disconnected. Going to look into that Claimyr thing.

ugh the phone situation with EDD is genuinely the worst part of this whole process. will check out that link

Good advice about proactively calling to flag the unreachable employer situation. Agents can add notes to your claim that can actually speed up processing significantly when there are unusual circumstances like a business closure.

California EDD cross-references employer payroll tax records that were already filed with the state. Employers are supposed to file quarterly wage reports, so EDD already has historical wage data in their system going back several quarters. They don't necessarily need the employer to respond to a current inquiry to verify past wages - the data should already be there from those quarterly filings.

Exactly right. The quarterly wage reports (DE 9 and DE 9C forms) that employers file are already in the system. Even if the employer disappears tomorrow, EDD can still see wages that were properly reported in prior quarters.

ohhhh okay that makes way more sense. so the data is already there from before. got it

A mass layoff is treated the same as an individual layoff for California EDD purposes - it's a separation through no fault of your own and you should qualify for benefits assuming you meet wage requirements. The difference is your former employer still exists and can respond to EDD's separation inquiry, which actually makes the process smoother in some ways.

okay good, i was worried the fact that they kept some employees on would cause issues with my claim somehow

nope, doesn't matter if they kept other people. what matters is YOUR employment ended through no fault of yours

This is exactly what I'm afraid of. Six weeks is a long time to go without income. Did they back pay you for the whole adjudication period once it was resolved?

Yes they did backpay everything once it was finally approved, so that was a relief. But the anxiety of not knowing for 6 weeks while bills pile up is genuinely awful.

this is such a common story and it's infuriating. EDD adjudication times have gotten a little better but 'a little better than terrible' is still terrible

The backpay piece is important - when adjudication is resolved in your favor, all the weeks you certified for during that waiting period get paid out. So make sure you keep certifying every week no matter what, even when your claim shows pending or in adjudication. Don't stop certifying.

Good question. For weekly certifications, you report income for the week it was earned, not when it was paid. So if you're still waiting on a final paycheck for work you already did, that income technically belongs to the week(s) you worked it. When/if you actually receive the final paycheck, you'd need to report it in the week you receive it AND potentially amend earlier certifications depending on the situation. This is actually worth asking an EDD agent about directly given the unusual circumstances.

okay that's complicated enough that I definitely need to call EDD to clarify. good to know before I accidentally mess up a certification

Yes definitely call to clarify this specific situation. Misreporting on certifications even accidentally can create overpayment issues later that are a huge headache to deal with. Better to get clear guidance upfront.

Oh I hadn't even thought about the W2 situation, that's a whole other headache coming later. Good to know there's an IRS process for that.

yeah she had to file a substitute W2 form or something. her tax person handled it. point is it's solvable just annoying

It was a small restaurant, probably under 20 employees total, so that probably doesn't apply to my situation but useful info for others!

wait this is real?? I work for a mid-size company and had no idea this was a thing

yeah look up California WARN Act if you're curious. the threshold is different from the federal one which makes it apply to more businesses

Correct, and WARN Act claims would be handled separately from your unemployment claim. California EDD processes are for unemployment benefits specifically. Labor Commissioner handles WARN Act violations.

Bankruptcy doesn't disqualify you from unemployment - your separation is still considered a layoff. The difference is there's technically still a legal entity (the bankruptcy estate) that EDD might try to contact. In practice for most employees it probably processes similarly to a full closure, though it's worth flagging the bankruptcy specifically when you file so EDD has the right context.

okay that's helpful. I was worried the bankruptcy would somehow make my claim legally complicated

The other thing with bankruptcy situations - if there are any wages owed to you, those become priority claims in the bankruptcy proceedings. Definitely worth filing a proof of claim with the bankruptcy court for any unpaid wages, vacation time, etc. in addition to your EDD claim. Two separate processes but both worth pursuing.

For a straightforward claim with no issues, 2-3 weeks is pretty typical before you see any action. 11 days is still within normal range. If you hit 3 weeks with no movement on UI Online, that's when I'd start trying to contact EDD.

okay 3 weeks is my mental deadline then thanks

mine showed nothing for almost 4 weeks before anything changed so try not to panic yet. easier said than done i know

This is great advice, I'm going to do this today. I have texts and emails trying to reach the owner after the closure so I can reference those in the message too.

Yes exactly, any documentation of attempts to contact the employer is great to include. Shows you made reasonable efforts and the non-response wasn't for lack of trying.

Paper trails are genuinely valuable with California EDD. The more context you can put in writing in the system the less likely a human reviewer has to make assumptions when they look at your claim.

47 times is genuinely insane. I'm sorry you went through that.

It's demoralizing in a way that's hard to describe. You're already stressed about money and then you spend your whole day just trying to talk to someone

This is why I mentioned Claimyr earlier in the thread - claimyr.com literally exists to solve this problem. Worth checking out if you're still struggling to get through. The demo video at https://youtu.be/JmuwXR7HA10 explains how it works. Nobody should have to call 47 times.

California EDD can investigate unusual circumstances but a business closure with documented evidence (landlord notice, no business operations, etc.) would be verifiable through multiple independent sources. Public records like business license cancellations, property records, etc. would corroborate the story. An actual documented closure would be very difficult to fake convincingly and I've never heard of claims being denied on suspicion of colluded closures.

okay fair, I was just curious how that would even work logistically

I mean in my case there's a literal padlock and a landlord notice on the door that half the neighborhood saw so I think I'm okay lol

This is the update I needed to see today, thank you!! Congrats on getting approved.

congrats!! five weeks is a long time but the backpay makes it worth it

honestly the relief when I saw that deposit was immense. just keep certifying and try not to spiral. easier said than done but it does resolve.

Happy for you!! These success stories are genuinely helpful to see when you're stuck in the waiting period

Is there a specific form or process for reporting that? Or just call EDD?

There's an online form on the EDD website for reporting suspected payroll tax violations. Search 'EDD payroll tax fraud' or something similar and you should find it. You can also report to the Labor Commissioner's office which handles wage theft separately.

Worth doing. Shady employers who skip payroll taxes and disappear are unfortunately pretty common in the restaurant industry especially. The more reports they get the more likely it gets investigated.

This is really the message I needed at the beginning of this process. I almost didn't file because I wasn't sure I qualified. Glad I did.

same honestly, the 'just file and see' approach is the right one. overthinking whether you qualify is just standing between you and potential benefits

yeah and the appeal process exists for a reason. a denial isn't the end of the road

Okay I keep seeing this mentioned and I'm going to actually try it. At this point I'll try anything.

Good luck! My friend said it was way easier than she expected. Hope you get your situation resolved.

Going to bookmark this for if my claim stalls - right now it's still early but good to have in my back pocket