Posts tagged ‘EDD’

Ha! Not in California

Eugene Volokh is writing about a case against an attorney who defrauded his firm.  The details are not important, what caught my eye is what is highlighted below:

Once again, this case does not turn on the bare fact that Attorney Siderits wrote-down his time; this case is about Attorney Siderits abusing his write-down discretion and lying to his law partners in order to collect almost $47,000 in bonuses to which he was not entitled. Attorney Siderits cannot seriously contend that firms must have a written policy forbidding stealing and lying before a misconduct charge for one of these actions can be sustained.

That certainly makes sense, but it does not apply at the California EDD, which administers (among other things) the state unemployment insurance program.  We terminated an employee for accepting money from a customer to provide a service, then pocketing the money and not providing the service.  I call this "theft", and had assumed all would understand that stealing from customers is a firing offense.   When California sent out its unemployment paperwork, we said this employee had been fired "for cause", which in many states means that they are ineligeable for full unemployment payments.

However, after some back and forth, I was eventually informed by the EDD that since I did not have an explicit policy in the employee manual that said "employees may not steal money from customers", then they could not recognize that she was fired for cause.  Even if I had put that in the manual, it probably would not have counted because the next thing EDD asked for is something in writing proving, with the employee's signature, that she had read that passage.   And from past experience with the EDD, my guess is that they likely would not have accepted firing on the first offense, but would have insisted we needed to have her steal from multiple customers, with written warnings each time, before we terminated her.

Basically, what this all means is that while the law technically says people can't be paid unemployment if fired for cause, California has made the standards of proof so absurd that this requirement is meaningless.  Everyone is going to get unemployment.

As it turns out, there is a silver lining from this lack of diligence by the state.  My business is seasonal and I can only offer summer work.   Most of my employees are happy with this, as they like to take the winter off (many are retired).  One is not supposed to collect unemployment if he or she is not actively seeking work, but my employees have discovered that California does zero dilligence to check this.  So some of them lie and say they are looking for work over the winter when they are not, and collect unemployment.  I know of two couples who spend their winter in Mexico but still collect their California unemployment like clockwork.   Not only is California not dilligent about it, but when I tried to report someone I knew who was collecting unemployment but not even in the country, I was threatened by the EDD official that I was risking substantial personal liability by submitting such a claim and opening my self up to civil suits and even prosecution for harassing the worker.  So of course I dropped it.

So what is the silver lining?  California is so eager to hand money in the off-season to support my employees' seasonal vacations that my unemployment insurance premium rate is already the worst possible.  My rates can't go any higher.  So if they insist on giving state money to a thief, it's not coming out of my pocket.