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Zoe Papadopoulos

Does my employer have to pay unemployment if I get laid off in California?

So I got laid off last week from my warehouse job and I'm trying to figure out how unemployment actually works. My coworker told me that my employer has to 'pay' my unemployment benefits directly, but that doesn't sound right to me. I filed my claim with California EDD already but now I'm second-guessing everything. Does the employer actually pay unemployment out of pocket, or does it come from some kind of state fund? And can my employer just refuse to pay or contest my claim and then I get nothing? I've been trying to call EDD to ask someone directly but the line is always busy or I get disconnected. Really need to understand how this works before I stress myself out more than I already am.

Your coworker has it a little mixed up. Employers don't pay your unemployment benefits directly to you - what happens is every employer in California pays into the state UI fund through payroll taxes. When you file a valid claim, California EDD pays you from that fund. Your employer can contest your eligibility (like if they claim you quit or were fired for misconduct) but they can't just refuse to 'pay' your benefits since they were already contributing to the fund the whole time you worked there.

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Oh okay that makes way more sense. So the taxes they paid are basically like insurance for situations like mine?

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Exactly right. The technical term is FUTA and SUI - federal and state unemployment insurance taxes. Employers pay these regardless of whether any of their employees ever file claims.

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this is actually a really common misconception, tons of people think employers pay benefits directly out of their bank accounts lol

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To add some detail - in California, employers pay State Unemployment Insurance (SUI) taxes on the first $7,000 of each employee's wages each year. New employers start at around 3.4% tax rate. So by the time you file a claim, your employer has already been funding the system. The California EDD then determines your weekly benefit amount based on your highest earning quarter in the base period, which is roughly the first 12 of the last 15 months before you filed.

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What does 'highest earning quarter' mean exactly? Does that mean if I earned more in like October-December last year that's what they use?

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Yes exactly. California EDD looks at your base period (typically the 12 months before the quarter you filed in) and finds the quarter where you earned the most. That quarter's earnings are used to calculate your weekly benefit amount, which can be up to around $450/week currently.

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wait i thought it was based on all your earnings not just one quarter?? i might have given someone wrong info now i feel bad

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I went through almost the exact same situation six months ago at my old distribution job. One thing I learned the hard way - your employer CAN contest your claim and that's where things get complicated. My former employer claimed I was fired for cause when really it was a straight layoff. My claim went into adjudication and I couldn't get anyone at California EDD on the phone for weeks. What finally worked for me was using Claimyr (claimyr.com) - it's a service that basically navigates the phone queue for you and gets you connected to an actual EDD agent. There's a video showing how it works at https://youtu.be/JmuwXR7HA10. Saved me a ton of frustration and I got my adjudication resolved within a few days of actually talking to someone.

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My employer definitely knows I was laid off along with 8 other people so I don't think they'd contest it, but it's good to know that's an option if things go sideways. I'll bookmark that Claimyr link just in case.

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employer contesting is so stressful, happened to my sister and it took forever to resolve

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Does Claimyr actually work? I've been trying to reach EDD for two weeks about a different issue and getting nowhere.

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It worked for me - I was skeptical too but after getting disconnected 11 times in one morning I tried it. You watch the demo video first which explains how it works, then it connects you. Definitely better than sitting on hold all day.

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employers HATE paying unemployment taxes because their rate goes UP when their former employees file claims. Its called experience rating. So yeah technically they already paid into the fund but if lots of their workers file claims their future tax rate increases. THATS why some employers try to contest claims even for legitimate layoffs, its all about keeping their tax rate low. The whole system is designed to make it hard for workers IMO

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You're right that experience rating is a thing - employers with more claims filed against them do pay higher SUI rates. But it's worth noting that contesting a claim you're legitimately entitled to is illegal, and California EDD does investigate both sides.

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sure its illegal but good luck proving it when your former employer has lawyers and you have nothing

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This is why documentation matters so much. Keep any layoff notice, email, or written communication from your employer about the separation. If they contest your claim and you have written evidence it was a genuine layoff, your appeal has a strong foundation.

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just file ur claim and don't overthink it. if u were laid off u should be fine. the employer thing people get confused about doesn't matter for most normal layoffs

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Yeah I think you're right, I'm probably overthinking it. I just want to make sure I don't do anything wrong.

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just make sure u do ur weekly certifications on time thats the most important thing

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Since you mentioned you already filed, here's what to expect next: California EDD will send your employer a Notice of Unemployment Insurance Claim Filed. The employer has about 10 days to respond if they want to contest the claim. If they don't respond or if they confirm the layoff, your claim should move forward to approval. You'll see status updates on UI Online. Once approved, you'll need to certify weekly (either through UI Online or by phone using EDD Tele-Cert) and report any work or earnings each week.

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How do I know if my claim has been approved? I just see 'pending' in UI Online right now.

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Pending is normal right after filing. It means EDD is processing. Once the employer response period passes and EDD reviews everything, it should update. You can also check your SDI Online or UI Online account for any notices or documents they've sent you - sometimes important information is there even if the status still shows pending.

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pending for me lasted like 2 weeks and then it just switched to approved one day with no notification, definitely keep checking

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I'm in a similar boat and also struggling to get through to EDD. I've been trying to reach someone about my claim status for like two weeks straight. Called every morning, tried the callback option, sent messages through UI Online - nothing. Someone mentioned Claimyr upthread and I just tried it based on that recommendation. Watching the demo now at https://youtu.be/JmuwXR7HA10. Will report back if it works for me.

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please do update us! i need to call EDD too and am dreading it

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It should work, fingers crossed for you. Make sure you have your claim number and SSN ready when you get connected so you can get right to the point with the agent.

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UPDATE: Got through! Took maybe 40 minutes but way better than the 3 hours I wasted yesterday getting hung up on. Agent confirmed my claim is processing and gave me a timeline. For anyone else struggling to reach EDD, definitely try claimyr.com

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One thing that's important to understand about the employer/unemployment relationship: if you're in a mass layoff situation (which it sounds like you might be with 8 coworkers also laid off), your employer may have had to file a WARN Act notice. This doesn't change how you file for UI but it does mean there's additional documentation on record. Also, in mass layoff situations, employers sometimes work directly with EDD to streamline the claims process, which can actually speed things up for you.

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I didn't know about the WARN Act thing. We did get about 2 weeks notice before the last day. Does that matter for my claim?

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Two weeks notice doesn't disqualify you or anything like that - you're still eligible. WARN Act actually requires 60 days notice for large layoffs but many employers don't fully comply. The notice period can occasionally affect the 'waiting week' calculation but for basic eligibility purposes a layoff is a layoff.

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oh wow i always thought if they gave you notice it meant you didn't qualify for unemployment. learned something new today

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my cousin works in HR and she says employers actually dread mass layoffs partly because of the unemployment tax implications. When a bunch of people file claims against the same employer at once their experience rating gets hit hard and their SUI rate can go way up the following year. So in a weird way the system does penalize employers financially for layoffs even if it's not a direct payment

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Your cousin is right about that. There are also some employer programs in California like the Work Sharing program where instead of laying people off, employers can reduce hours and let employees collect partial UI. Some employers use that to avoid big experience rating hits.

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Interesting, my employer definitely didn't do any work sharing program - they just ended our positions entirely.

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yeah work sharing is underused honestly, most employers don't even know it exists

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not to derail but can I ask - do you have to pay back unemployment if your employer successfully contests AFTER you've already been getting payments? This has been keeping me up at night because my former job is shady and I feel like they might try something

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Unfortunately yes - if a claim is overturned after you've received benefits, California EDD can issue an overpayment notice requiring repayment. However, you also have the right to appeal any disqualification decision, and if the original approval was made in good faith on accurate information you provided, the overpayment rules are applied differently than in cases involving fraud.

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To add to that - if your employer contests and wins, you can then appeal THEIR contest. The appeals process goes through the California Unemployment Insurance Appeals Board (CUIAB). You have 30 days from any disqualification notice to file an appeal. Document everything and consider getting free legal help from a legal aid organization if the amount is significant.

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okay this is terrifying but also helpful thank you. Going to make sure I keep all my documentation just in case

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genuine question - if your employer goes bankrupt before paying their unemployment taxes does that affect your ability to collect UI? asking for a somewhat relevant situation

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Good question - generally no, because the SUI taxes are paid continuously as wages are earned, they're not a separate fund held by the employer. The state fund has your contributions already. However if wages went unpaid in the period right before bankruptcy that could complicate your base period calculations. That's a situation worth calling EDD about directly.

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okay that's actually a relief to hear, was worried about this

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Going back to the original question since it's worth being super clear: No, your employer does NOT pay your unemployment directly. They cannot withhold payment from you or refuse. What they can do is contest your eligibility, which triggers an adjudication process. During adjudication your payments may be on hold while EDD investigates both sides. If your layoff is legitimate and documented, you will likely prevail in adjudication. The whole process is designed to protect workers from retaliation while also preventing fraudulent claims.

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This is the clearest explanation I've gotten, thank you. I feel a lot better about my situation now. Just going to keep certifying weekly and wait for my claim to process.

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yes weekly certifications even while pending is SO important - i missed a week during my claim and it caused all kinds of headaches to fix afterward

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I've seen people say this before but it bears repeating - screenshot EVERYTHING in UI Online. Every status update, every notice, every certification confirmation. The system sometimes glitches and having screenshots has saved me twice from having to prove I certified on time. Also download any documents EDD sends to your inbox in UI Online because they don't stay there forever.

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This is really good practical advice, going to start doing this right away.

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seconding this so hard, the EDD system has lost my certifications before and having screenshots was the only way to prove I submitted them

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exactly. treat it like the flaky government website it is lol, always have your own backup records

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Something nobody mentioned yet - your weekly benefit amount in California is roughly 60-70% of your average weekly earnings up to the maximum. If you were making decent money at your warehouse job you might be surprised how much you get. Use the EDD benefit calculator on their website to get an estimate before your award letter arrives so you can budget accordingly.

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I actually tried the calculator and it said around $380/week which is less than I hoped but at least I know what to plan around.

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$380 is pretty typical for mid-range warehouse wages. Remember you also get a 1 week unpaid waiting period before benefits start, so factor that into your budget for the first payment.

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the waiting week is annoying but at least it's only one week now, used to be worse

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Had almost this exact situation last year. Was laid off from a fulfillment center job, employer tried to claim I'd quit voluntarily which was completely false. My claim went into adjudication for almost 5 weeks. During that time I couldn't get EDD on the phone no matter what I tried. Someone in a different forum suggested Claimyr and I was honestly desperate enough to try anything. Got an agent within the same day, explained my situation, the agent flagged my case for expedited review and within a week I had my decision in my favor plus backdated payments for all the weeks in adjudication. Whole experience was miserable but at least I eventually got what I was owed.

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That's reassuring to hear it worked out even with a contested claim. And good to know about Claimyr as a backup option if things get complicated.

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Can confirm Claimyr works as I posted above. For anyone reading this later - claimyr.com and watch the demo at https://youtu.be/JmuwXR7HA10 first so you know what to expect.

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5 weeks in adjudication sounds absolutely brutal. How did you handle bills in the meantime?

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It was rough. I had to borrow from family and defer some bills. The backdated payments when they finally came through helped but the stress was unreal. Apply for any local emergency assistance you can find if you're in adjudication, don't just wait on EDD.

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OP since you were in a group layoff, ask your former employer's HR if they did a mass claim filing with EDD. Sometimes when companies do large layoffs they work with EDD to pre-verify everyone's last day and separation reason which can massively speed up your individual claim processing. Worth a quick email to HR to ask.

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Oh that's a great tip, I'll reach out to HR and ask. I'm still on okay terms with my former supervisor so I can probably get an answer quickly.

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Good luck! And even if they didn't do a mass filing, having your supervisor's contact info handy is useful in case EDD needs to verify anything.

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can someone explain what happens during the waiting week? like do i still have to certify for that week or just skip it

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You do still certify for the waiting week - you just don't receive payment for it. Think of it as week 1 of your claim that you complete but don't get paid for. Every week after that, certify on time and you should receive payment 2-3 business days after certifying (if direct deposit is set up).

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oh okay i did not know you had to certify the waiting week, thanks for clarifying

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Also just to be sure - your waiting week starts from the date your claim is approved, not from when you filed. So if there's a processing delay, the waiting week clock doesn't start until approval.

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One final thing worth knowing for OP's situation and anyone else reading - California is actually one of the more worker-friendly states for unemployment. The eligibility requirements are relatively accessible, benefits can last up to 26 weeks, and the appeals process genuinely does favor workers when they have documentation of a legitimate layoff. The frustration is usually about the communication and processing side of EDD, not the actual rules. The rules themselves are pretty fair.

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Good to hear. I know some people in other states have had way worse experiences. I feel a bit better about my situation now after this whole thread. Thanks everyone for the help!

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26 weeks sounds great until you realize how long it actually takes to find a new job sometimes. The system is better than nothing but could definitely be improved

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100% agree it's not perfect. But compared to many places the fundamentals are solid. Good luck OP - sounds like your claim should go smoothly.

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