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Patrick, Esq.
Patrick, Esq., Lawyer
Category: California Employment Law
Satisfied Customers: 7115
Experience:  Significant experience in all areas of employment law.
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I usually work 60-80 hours per week (8.50/hour hourly employee)

Resolved Question:

I usually work 60-80 hours per week (8.50/hour hourly employee) but my employer has reduced my employment to just 40 hours a week. Unfortunately, the only way I was making ends meet (and just barely) was through the additional overtime. I have been working these long hours for 2 years now. This is in California.

If I resign due to a reduction in hours, can I draw unemployment while I search for other employment? What sorts of "ducks" can I line up to prevent my employer from contesting unemployment if I do decide to resign and are eligible?
Submitted: 1 year ago.
Category: California Employment Law
Expert:  Patrick, Esq. replied 1 year ago.

Good afternoon and thank you for entrusting me to answer your question. I am very sorry to hear about this reduction in hours and the difficulty you now have making ends meet.

Generally speaking, a claimant must prove that they are unemployed "through no fault of their own" in order to receive unemployment benefits. Where a claimant quits their job, they must demonstrate that their resignation was with "good cause" or else the EDD will reason that they are unemployed "through fault" (since they voluntarily chose to leave their work) and deny the claim.

An employee will be found to have quit with "good cause" if they can demonstrate a substantial cut in their pay. To this end, the EDD states as follows in their Benefits Determination Guide:

"An employer is often forced to reduce wages for economic reasons. However, the fact that the employer's declining business necessitated reducing employee wages, does not impose a duty upon the employee to accept the reduction. In cases involving wage reductions, good cause is measured by the reasonableness of the claimant's actions in relation to the circumstances existing at the time of quitting.

Title 22, Section 1256-22(b), Comments provides:

. . .factors other than a pay reduction influence an individual's decision to leave the work, all such factors are evaluated to determine whether a reasonable person genuinely desirous of retaining employment would have left the work. . . . However, a pay decrease of 20% or more, taken alone, is a substantial reduction in pay to establish good cause for leaving work where the employee is notified of a transfer or demotion to another position with the employer. Pay includes the basic wage, shift differentials, board and room furnished by the employer and guaranteed overtime. Pay also includes fringe benefits such as vacation pay and insurance if such fringe benefits are currently available or set schedules and information to value fringe benefits for the former and other position are available."

As noted above, reductions in pay of more than 20% are a "substantial reduction in pay to establish good cause." Since you indicate that your pay is being reduced by more than that percent due to your reduction in hours, quitting would ordinarily be with "good cause" under the circumstances you describe, and so even if you quit an individual in your circumstance would likely remain eligible for unemployment.

As a caveat, each claim for unemployment benefits is judged on its unique facts. There are few hardline rules here, and while the law would support a claim for unemployment benefits under the circumstances, you will always be assuming some risk that your claim will be denied since the presumption when an individual quits is that they are unemployed "through fault."

Please do not hesitate to let me know if you have any questions or concerns regarding the above and I will be more than happy to assist you further.

If you do not require any further assistance, please be so kind as to provide a positive rating of my service so that I may receive credit for assisting you. Very best wishes to you and thank you so much for coming to Just Answer.

Customer: replied 1 year ago.

Thank you for the response! Per my closing question: is there anything I should go in order to gather information should I resign and the employer contest the issue? If it were to go to contention, I would ideally want to avoid a "he said, she said" argument.

Any insight about what sorts of documentation or items I should obtain before making a decision of resignation?

Expert:  Patrick, Esq. replied 1 year ago.
Dale,

Thank you for your reply. I'm sorry for not addressing that specifically above. I actually had it in mind to, and then somehow forgot.

An individual in your circumstance will ordinarily want to tell your employer in writing (preferably via email, since that way there will be record the message was sent) that the reduction in hours is resulting in substantial hardship and an inability to pay your bills, and that if your hours are not restored that you will be compelled to leave and find other work.

This is a worthwhile step to take, as it will strengthen your argument that you are truly unemployed "through no fault of your own," since you now have record that you alerted your employer to the problem and gave them an opportunity to correct it.

Please feel free to let me know if I can provide any further assistance whatsoever. I wish you the very best in finding new employment.

Kindest regards.
Patrick, Esq., Lawyer
Satisfied Customers: 7115
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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