California Agency Pays Unemployment Benefits to Workers Terminated for Misconduct

A California agency erroneously paid out $1.3 million in unemployment benefits to workers that had been fired for misconduct – a stunning 25% of the unemployment benefits paid by the agency in the year. An outside auditor found that the agency repeatedly failed to provide adequate documentation regarding the terminated employees, and failed to respond within deadlines set by the California Employment Development Department (EDD). One worker that received benefits had been fired for refusing to cooperate with police after being involved in a drunk driving hit and run. Another had sold drugs and had been involved with a gang.

This example of phenomenal waste provides a useful lesson for California employers. A discharge for misconduct disqualifies an employee from receiving unemployment compensation benefits from the EDD. “Misconduct” is conduct that evinces willful or wanton disregard of an employer’s interest and involves deliberate violations or disregard of reasonable rules of conduct set by the employer.

Examples of such misconduct include failure to obey an employer’s rules or orders, absences from work, failure to perform work properly or neglect of duty, tardiness, and violations of the law.

  1. If an employment termination is performance-based, it is best to have documentation as necessary to establish, at minimum:
  2. the specific nature of the performance issues, referencing existing written policies of the employer whenever possible;
  3. warnings to the employee that further misconduct will result in termination, and
  4. the employer’s willingness to train, coach, or otherwise reasonably assist the employee in improving performance.

This documentation will help establish that the employee was terminated for misconduct, and as such, is not entitled to unemployment insurance benefits. In addition, employers should make sure that they contest claims for unemployment by workers fired for misconduct, complying with all deadlines set by the EDD for responding the the employee’s claim.

This article is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.