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PARTIAL/REDUCED UNEMPLOYMENT: ELIGIBILITY AND BENEFITS AMOUNT


You might think that unemployment benefits are available only to those who are completely out of work, but that's not necessarily the case in California. Even if you are still working part-time or you are still employed at reduced pay and hours, you may be eligible for unemployment benefits, depending on your earnings and your situation. California has several programs that offer "partial" unemployment benefits: A portion of the benefit you would receive if you were fully unemployed, reduced to take into account your earnings.


This program is for employees whose employers want to retain them, despite a current lack of work. By applying for benefits through this program, an employee doesn't have to show that he or she is able and available to work and looking for other work. Because the situation is supposed to be temporary and the employer wants to keep the employee, the employee isn't obligated to conduct a job search.


ELIGIBILITY FOR PARTIAL UNEMPLOYMENT


State law determines eligibility for unemployment benefits, including partial unemployment benefits. Generally speaking, however, an employee will be eligible for benefits if all of the following are true:

  • You are underemployed, meaning that you are working part time through no fault of your own. For example, if your company cut the hours of everyone in your department in order to avoid layoffs, you would likely meet this eligibility requirement. You may also be eligible if you lost your full-time job and have only been able to find occasional or limited part-time work. Depending on your state's rules, you may be eligible for partial benefits if you had two part-time jobs and lost one of them. However, regardless of how your state determines eligibility for partial benefits, you will not be eligible if you could be working more. For example, if you voluntarily chose to reduce your hours or work part time so you could take care of your children, you would not be eligible.

  • You meet your state's minimum earnings or minimum hours worked requirements. These are the same whether you apply for regular or partial unemployment benefits.

  • You are able and available to work more. In other words, if your hours are cut to ten per week, you won't be eligible if you decide to go back to school full time and wouldn't be able to work more hours.


PARTIAL UNEMPLOYMENT BENEFIT AMOUNTS


To figure out your weekly benefit amount, your state's unemployment agency will calculate how much you would receive if you were completely unemployed. Then, the state will subtract what you are actually earning each week, less a small allowance. Most states let applicants keep a little bit of what they earn, without reducing their benefit amounts, to encourage people to take occasional work. The difference is your weekly partial unemployment benefit.


In California, someone is considered "unemployed" during any week in which the person's regular wages, minus $25 or 25% of those wages (whichever is more), is less than they would earn as a weekly unemployment benefit. In this situation, an employee who meets the other eligibility requirements would receive a check for the difference.


Example:


Bryanna works in California and would be eligible for a $450 weekly unemployment check (California's current maximum amount) if she were fully unemployed. Her employer has cut her hours/pay back so she currently earns $320.


California will disregard the first $25 or one-quarter of an employee's earnings (whichever is more) in calculating partial unemployment benefits. The state would not count one-quarter of her earnings ($80), but would subtract the rest ($240) from the weekly benefit she would receive if she were unemployed ($450) to come up with her partial benefit amount: $210.

She would earn $210 per week: $450 minus 75% of $320 ($240) = $210.

REDUCTION IN SALARY FOR EXEMPT EMPLOYEES


Sometimes salaried employees must accept a reduction in salary when employers are trying to save money, while not reducing staff size. If exempt employees have their salaries reduced, they may not always qualify. An employer is not prohibited from prospectively reducing the predetermined salary amount to be paid regularly to a Part 541 exempt employee during a business or economic slowdown, provided the change is bona fide and not used as a device to evade the salary basis requirements.


Such a predetermined regular salary reduction, not related to the quantity or quality of work performed, will not result in loss of the exemption, as long as the employee still receives on a salary basis at least $684 per week. If your pay is cut below this amount, you may be eligible to collect unemployment benefits. Contact your nearest unemployment insurance office to discuss your specific situation.


On the other hand, employers should understand that deductions from predetermined pay occasioned by day-to-day or week- to-week determinations of the operating requirements of the business constitute impermissible deductions from the predetermined salary and would result in loss of the exemption. The difference is that the first instance involves a prospective reduction in the predetermined pay to reflect the long term business needs, rather than a short-term, day-to-day or week-to-week deduction from the fixed salary for absences from scheduled work occasioned by the employer or its business operations.


To find out your state's rules on partial unemployment benefits you van search Career One Stop, or contact your state unemployment agency.


Visit Rothmeyer | Rothmeyer for the latest updates. We are here to assist you with the unique challenges faced by all of us during this unprecedented time.


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