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Patrick, Esq.
Patrick, Esq., Lawyer
Category: California Employment Law
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Experience:  Significant experience in all areas of employment law.
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Hi, I live in the state of California; my current company

Resolved Question:

Hi,
I live in the state of California; my current company wants me to accept a "mutual agreement of separation" vs. a 30 day action plan to remedy the situation, though verbally they told me the usual outcome is termination.

My question is am I guaranteed (100%) Unemployment Benefits if I accept a "mutual agreement of separation" and report Mutual Agreement of Separation in the other box when filing for unemployment?
Submitted: 2 years ago.
Category: California Employment Law
Expert:  Patrick, Esq. replied 2 years ago.
Hello and thank you for entrusting me to answer your question. I am very sorry to hear about your employment situation and hope I can provide some helpful information. You asked:

My question is am I guaranteed (100%) Unemployment Benefits if I accept a "mutual agreement of separation" and report Mutual Agreement of Separation in the other box when filing for unemployment?

Unfortunately, the answer is "no." In fact, accepting a "mutual agreement of separation" can actually hinder an employee's right to collect unemployment benefits. This is because one of the requirements for collecting benefits is that a claimant be unemployed "through no fault of his or her own." When an employer and employee "mutually agree" to separate, the EDD may construe this as "voluntary" unemployment, since the employee was in agreement that the employment relationship should end.

In general, an individual will be eligible to receive benefits provided that they have received enough wages during the base period to establish a claim (either $1300 in one quarter of their "base period," or at least $900 in their highest quarter and total base period earnings of 1.25 times their high quarter earnings), they are physically able and available to immediately accept work, actively seeking work, and unemployed through no fault of their own.

It is important to understand that even when an employee is "terminated," as opposed to "laid off," they often are still eligible to collect benefits. "Termination" only precludes a claimant from collecting benefits if they were terminated for engaging in willful misconduct. Willful misconduct includes such things as stealing from the employer, showing up to work drunk, and other things that an employee should reasonably assume will harm the employer.

Merely being a poor worker or failing to follow instructions on a particular assignment, for example, will not typically disqualify an applicant from collecting benefits.

So to summarize, signing an agreement of "mutual separation" can actually harm a claimant's right to collect UE benefits because the EDD may regard the claimant's unemployment as "voluntary" under such circumstances. A claimant will be eligible to collect benefits even if they are "terminated" unless they engage in "willful misconduct," typically speaking.

For information on how to file a claim for unemployment benefits with the EDD, visit this link: http://www.edd.ca.gov/unemployment/filing_a_claim.htm

I sincerely XXXXX XXXXX this information helps you and I wish you the best.

My absolute greatest concern is that you are satisfied with the answer I provide, so please do not hesitate to contact me with follow-up questions. Also, please bear in mind that none of the above constitutes legal advice nor is any attorney client relationship created between us.
Customer: replied 2 years ago.

Hi,

Thanks for responding. I just received some information from HR - They would select Termination - Mutual Agreement. Seems to me to still be jeopardizing my UI claim.

I am confident if they terminate me it is not due to willful misconduct, but then they are telling me I will not receive my two weeks of work pay, not a severance but they were going to let me transition the work to another person. Any further advice?

Thanks,
Serge

Expert:  Patrick, Esq. replied 2 years ago.
Serge,

Thank you for your followup. First, to clarify, I cannot provide "advance" per the terms and conditions of Just Answer, I can only provide information. You must ultimately decide what to do.

The above noted, I can tell you that the reason companies want to characterize termination as "mutual separation" is exactly so that they can avoid paying unemployment benefits on the grounds I explained above.

If your company is saying that they won't pay you for your two most recent weeks of work already completed unless you accept "mutual separation," that would be illegal, typically speaking. An employer is required to pay all wages earned IMMEDIATELY upon separation of employment (Labor Code 201).

If your company is saying they will provide an ADDITIONAL two weeks of pay following separation of employment if you agree to characterize it as "mutual," that is obviously an incentive for you to accept this "employer friendly" characterization of your termination so that they can avoid having their UE insurance premiums go up by having you make a claim for benefits.

While it is still technically possible to get UE benefits even when separation of employment is characterized on paper as "mutual," an individual in your circumstance would then have to overcome the presumption of voluntariness and prove to the EDD that you were let go without your consent. This can be very hard to do.

Thus, the question you must answer for yourself is whether it is worth the risk of not being able to collect UE benefits by characterizing your termination as a "mutual separation" by gaining the potential benefit of transitioning the work to another person, etc.

Again, my number one goal is that you are satisfied with my answer. If you still require further clarification, I am happy to continue assisting you.
Customer: replied 2 years ago.
Hi,

Thanks for responding. I just received some information from HR - They would select Termination - Mutual Agreement. Seems to me to still be jeopardizing my UI claim.(Can you confirm?)

I am confident if they terminate me it is not due to willful misconduct, but then they are telling me I will not receive my two weeks of work pay, not a severance but they were going to let me transition the work to another person. Any further advice?

Thanks,
Serge
Expert:  Patrick, Esq. replied 2 years ago.
Serge,

It appears that your followup has been reposted. I repsonded to this inquiry when you initially posted it, but in case you are having trouble viewing it, I will provide my response for you again here. What I said was as follows:

First, to clarify, I cannot provide "advance" per the terms and conditions of Just Answer, I can only provide information. You must ultimately decide what to do.
The above noted, I can tell you that the reason companies want to characterize termination as "mutual separation" is exactly so that they can avoid paying unemployment benefits on the grounds I explained above.

If your company is saying that they won't pay you for your two most recent weeks of work already completed unless you accept "mutual separation," that would be illegal, typically speaking. An employer is required to pay all wages earned IMMEDIATELY upon separation of employment (Labor Code 201).

If your company is saying they will provide an ADDITIONAL two weeks of pay following separation of employment if you agree to characterize it as "mutual," that is obviously an incentive for you to accept this "employer friendly" characterization of your termination so that they can avoid having their UE insurance premiums go up by having you make a claim for benefits.

While it is still technically possible to get UE benefits even when separation of employment is characterized on paper as "mutual," an individual in your circumstance would then have to overcome the presumption of voluntariness and prove to the EDD that you were let go without your consent. This can be very hard to do.

Thus, the question you must answer for yourself is whether it is worth the risk of not being able to collect UE benefits by characterizing your termination as a "mutual separation" by gaining the potential benefit of transitioning the work to another person, etc.

Again, my number one goal is that you are satisfied with my answer. If you still require further clarification, I am happy to continue assisting you.
Patrick, Esq., Lawyer
Satisfied Customers: 6796
Experience: Significant experience in all areas of employment law.
Patrick, Esq. and other California Employment Law Specialists are ready to help you

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