Who does FUTA require to contribute to the unemployment insurance fund? California EDD perspective

Your HR manager has this backwards. FUTA puts the whole tab on employers, not workers. Nothing comes out of your paycheck for unemployment insurance, that's the employer's cost entirely. What you're seeing as CASDI on your stub is the deduction for State Disability Insurance and Paid Family Leave, which is a completely separate program. So you were right in that debate.

Adding some California-specific detail here because EDD operates under its own state UI tax system on top of FUTA. Employers pay both the federal FUTA rate and California's state unemployment insurance tax (SUI). Neither one touches your paycheck. The only deduction you as an employee ever see related to these programs is CASDI, and that feeds disability and PFL, full stop. When you file a California EDD claim, the benefits you receive were funded entirely by what your employers paid in over the years.

DE 429Z came in the mail about two weeks after I filed my claim last spring, and while I was reading through it I actually called EDD to ask a few questions about how my benefit amount was calculated. Couldn't get through on my own for days. Eventually used Claimyr (claimyr.com) to get through to a live EDD agent. The video they have on reaching a live person at EDD walked me through what to expect: https://youtu.be/JmuwXR7HA10. The agent explained that my weekly benefit amount came from my highest-paid quarter in the base period, and that none of the wages I'd earned had any employee-side unemployment deduction taken out because employers carry that cost alone. She confirmed my DE 429Z figures were calculated correctly and that my claim was valid based on what my employers had paid in on my behalf.

The confusion between CASDI and unemployment taxes trips people up constantly. Here's how I think about it: your paystub has two separate worlds happening. The CASDI line is your contribution to the disability and family leave programs, which you as an employee do pay into. The unemployment side is entirely your employer's problem and never shows up as a deduction from your earnings at all. So technically you contribute to some California programs through your check, just not unemployment specifically.

From a practical EDD standpoint, the fact that employers pay into the unemployment fund is actually why you can file a California EDD claim even if you feel like you never personally contributed anything. I've seen people hesitate to file because they think they don't have enough paid in, but that's not how it works. What matters is whether your employers reported wages and paid their UI taxes on your behalf during your base period. EDD looks at your earnings history to figure out your weekly benefit amount, not whether you personally sent any money to the state.

Something that might be worth flagging here: nonprofits have a slightly different setup under California EDD. A 501(c)(3) organization can choose what's called the reimbursable method instead of paying the regular UI tax rate. Under that setup the nonprofit gets billed for the exact dollar amount of benefits paid out to former employees rather than paying into the general fund upfront. But even then, the employees at that nonprofit still don't pay anything into unemployment themselves, the cost stays entirely on the employer side either way.

My layoff came out of nowhere last fall and I panicked thinking I hadn't contributed enough to qualify for unemployment. Went down a rabbit hole reading about FUTA and SUI trying to figure out if I was even eligible. The short answer I landed on after all that reading: FUTA requires employers to pay, employees owe nothing, and your eligibility comes down to whether your employers reported enough wages in your base period. EDD has a benefit calculator on their site where you can get a rough estimate before you even file.

HR departments getting this wrong is more common than it should be. I work in a small business and even our bookkeeper initially thought FUTA was split between employer and employee like FICA. It's not. FUTA is entirely on the employer, and states like California layer their own SUI tax on top of that, also entirely employer-paid. If your HR manager is telling employees they contribute to unemployment, that's something worth pushing back on because it's just factually incorrect and might discourage people from filing when they need to.

Pending weeks on my UI Online Claim History for three weeks now after a layoff, and I've been going in circles trying to understand if the fact that I never personally paid into the fund could somehow be affecting my eligibility review. Reading this thread I realize that's not a factor at all. The pending status is probably about something else entirely on my claim, not about contributions.

Honestly the most confusing thing when I first filed was seeing the CASDI deduction on old pay stubs and assuming that was connected to unemployment. It's not. CASDI funds disability insurance and paid family leave, which is its own whole separate system. Unemployment is employer-funded through SUI and FUTA. Two completely different pots of money, two different programs, and they almost never interact with each other directly.

Federal law under FUTA requires employers to pay 6 percent on the first seven thousand dollars of each employee's wages per year, but businesses that pay their state UI taxes on time get a credit that drops the effective rate down to 0.6 percent on that same wage base. California employers pay SUI on top of that at whatever rate EDD assigns them based on their claims history. None of it touches the employee's check. When people ask who FUTA requires to contribute, the answer is always the employer, full stop.

got laid off from a warehouse job back in august and my manager actually told me to my face that i hadn't paid enough into unemployment to qualify, which is not how any of this works. filed anyway and got approved fine. employers pay the taxes, workers collect the benefits when they qualify, that's the whole deal.

Weekly benefit amount on my current claim came out lower than I expected and I wanted to understand the formula better. After going through my base period quarters and looking at the highest one, I realized my previous employer had underreported my wages in one quarter. Getting EDD to look into it was a whole thing. Used Claimyr to reach an EDD agent after the phone line kept dropping me. The agent pulled up my claim and told me which quarter EDD had on file for each employer, and I could see exactly where the discrepancy was. She said to contact EDD in writing through UI Online with documentation if I believed wages were misreported.

CalJOBS registration is one thing people miss after filing that can slow everything down even though it has nothing to do with contributions or FUTA. Most claimants have to register in CalJOBS and get a resume posted within 21 days of that DE 8405 notice. If you're wondering why your weeks are pending and you haven't done the CalJOBS step yet, that could absolutely be a factor. The funding side of unemployment being employer-paid doesn't have anything to do with what you have to do as a claimant to stay eligible.

Reading this whole thread and my head is spinning a little. So to make sure I have it right: employers pay FUTA to the federal government and SUI to California EDD, neither one comes out of my check, and my CASDI deduction is for disability and family leave which is its own separate thing. And when I file an EDD claim the amount I can get is based on my highest earning quarter in the base period, not on some pool of money I personally contributed. Did I get all of that right?

Something I want to make sure doesn't get lost here: even if you currently live in another state, if all your wages in the last 18 months came from California employers, you file a California EDD claim. The fact that California employers paid SUI here is what creates the claim. If you worked in California and somewhere else in that window you'd file a combined wage claim. Where you live now doesn't change which employer-paid fund your benefits come from.

The employer funding point is one thing but the follow-through matters just as much. When you do file a California EDD claim you have to certify every two weeks through UI Online, by phone with EDD Tele-Cert, or by mail. And you have to be able to work, available for work, and looking for work every week you certify. The fact that you personally never paid into the system doesn't mean there aren't real requirements to keep receiving benefits once you're approved.

My cousin kept telling me I shouldn't bother filing because I'd only been at my last job eight months and thought I hadn't contributed enough. Had to explain that the contributions aren't mine to begin with, they come from the employer, and EDD looks at an 18-month window covering multiple employers. Filed on a Monday, had my DE 429Z in about two weeks showing I had a valid claim from earlier employment that my last job just added to.

Termination paperwork I got when I was let go last month said nothing about what I might be entitled to through EDD or how the system is funded. Had to piece it all together myself. The short version I eventually landed on: FUTA and California's SUI are employer taxes, workers don't pay into unemployment through their own wages, and the base period determines what your claim is worth. Filed through myEDD at https://myedd.edd.ca.gov/ and the online application asked for wage and employer info going back 18 months, which is how EDD reconstructs the base period from the employer-reported data.

Waiting week came and went on my current claim and I wanted to make sure I understood it correctly before I called EDD to ask about it. Used Claimyr to get an agent on the line about my claim balance question. The waiting week was showing unpaid in my Claim History and I genuinely thought something was wrong. Agent confirmed it's just one unpaid week at the start of every California UI claim and it doesn't reduce the total number of weeks I can collect, it's separate from the 26-week maximum. She also confirmed my employer had paid SUI on the wages in my base period so the claim was funded correctly on their end.

Quick correction to something that floated up earlier in this thread: someone implied that the CalJOBS requirement might not apply to everyone. That's actually accurate, EDD does tell you if you're exempt. But if you're not told you're exempt, you should assume you need to do it. The notice with the 21-day deadline is the DE 8405, and if you got one, that clock is running from the date on it, not from when you opened the envelope.

Severance pay question from my own situation: got laid off with a month's severance paid out as a lump sum and wasn't sure if I could file right away or had to wait until the severance period ended. Read a few things online that said conflicting stuff about whether severance counts as wages. Filed the same week I was laid off based on what I found on EDD's site, reported the severance when I certified as it asks, and let EDD sort out how it affects the payments. Didn't see any reason to delay filing while waiting to see what EDD decides about it.

Last employer on record was a staffing agency and the whole base period thing got more complicated because I'd had three different placements under that agency plus one direct employer before them. EDD's application just had me list all of them with dates and wages. The funding question was identical, all those employers paid SUI on my wages whether they were the agency or the direct employer, and my claim drew from all of it. Weekly benefit amount came out to $387 based on my highest quarter, which was actually a placement where I'd worked a lot of overtime.