Skip to content
Liebert Cassidy Whitmore logo

California Public Agency Labor & Employment Blog

Useful information for navigating legal challenges

Menu

HomeAboutMeet the TeamServicesResourcesContactSubscribe

Beware: “We Won’t Contest Unemployment Benefits Application” Clauses May Result in Charges to Your Unemployment Benefits Reserve Account

By Guest Author on December 17, 2013
Posted in Retirement

Retirement_Graphic.jpgThis post was authored by Judith S. Islas

Employment separation settlement agreements frequently contain provisions whereby employers agree not to contest unemployment benefit applications. When the terminated employees then file for unemployment benefits, the Employment Development Department (EDD) asks the employer for information as to why the employee was let go. These employers then, because of the “we will not contest provision,” provide EDD with no information that might preclude benefits eligibility. Other times, the employers simply provide no information at all. 

Is there any risk in this practice? Is this a no cost, risk free way to help secure a full general release of all claims from terminated employees?   Like many things that seem “free” there is a risk.   The Unemployment Insurance Integrity Act (“Act”), which took effect October 21, 2013,  requires all 50 states to have laws that punish employers who show a “pattern” of not responding “timely or adequately” to the unemployment agency’s (the EDD in California) requests regarding unemployment claims.  Employers who do not respond accurately – or who do not respond at all – will not be credited for charges to their unemployment tax account for erroneously paid unemployment benefits.  Thus, employers cannot have it both ways: you cannot on the one hand withhold information that would disqualify a terminated employee from receiving benefits and then ask to be credited because benefits were erroneously paid to that employee.

California law implements this federal mandate. Unemployment Insurance Code section 1026.1 requires that an employer’s reserve account shall not be “relieved of charges” for a benefit overpayment if the benefit was paid because the employer did not respond timely or adequately to the EDD’s questions about the terminated employee’s benefits claim.

Practice Pointer

What does this mean to agencies?  Is there anything agencies can do to try to protect against not being credited for charges to their account if they include “we won’t contest” clauses in separation agreements or other settlements?  To protect against risk, we suggest that, at a minimum, separation settlement agreements containing “we won’t contest unemployment benefit application” commitments also specify that agency will truthfully and accurately respond to EDD inquiries. This allows agencies to comply with their agreements by not actively contesting benefit application, but still timely, truthfully and accurately responding to the EDD’s information requests. That is, you would still tell EDD why the person was fired, but you would not advocate before EDD that benefits should be denied. This should help lessen or eliminate the risk of not being credited for charges to the agency’s unemployment tax account.

Tags: "Employment Development Department", "Reserve Account", "Unemployment Benefits", EDD
Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Related Posts
pexels-rodnae-productions-7092613
Public Education Agencies, Take Heed!  If You’re Not Paying Attention to SB 278 and AB 1667, You Could Be On the Hook for Repaying CalPERS or CalSTRS A Lot of Money
March 2, 2023
pexels-anastasia-shuraeva-5705077
A Closer Look At The Restrictions On Hiring Retirees (And Also The Exceptions!)
May 18, 2022
retirement
CalPERS Requirements Public Agencies Should Know Heading into the New Fiscal Year
May 26, 2021

About LCW

Liebert Cassidy Whitmore is a full service employment and labor relations law firm providing expert consultation, representation, litigation, negotiation and investigation services to public agency management…

Read More....

Stay Connected

View Our LinkedIn Profile Subscribe to this blog via RSS Follow Us on Twitter

Archives

Topics

Related Articles

  • Tips from the Table: How to Respond to Union Requests for Information During Bargaining
  • Court of Appeal finds that the Statute of Limitations is 1 year from the discovery of each act of misconduct from an Employee
  • 2023 Legislative Session: Employment Bills to Watch
  • Public Education Agencies, Take Heed!  If You’re Not Paying Attention to SB 278 and AB 1667, You Could Be On the Hook for Repaying CalPERS or CalSTRS A Lot of Money
  • Public Safety Video Briefing: Thinking About Body Worn Cameras- February 2023

Blog Authors Show/Hide

  • Larissa Alvarez
  • Elizabeth Arce
  • Megan Atkinson
  • Steven M. Berliner
  • Richard Bolanos
  • Peter J. Brown
  • Dana Burch
  • Tony Carvalho
  • Melanie Chaney
  • Lisa S. Charbonneau
  • Kevin Chicas
  • Heather DeBlanc
  • Jenny Denny
  • Brian Dierze
  • Jenny-Anne S. Flores
  • Chris Frederick
  • Jeffrey C. Freedman
  • Adrianna Guzman
  • Troy Heisman
  • Leighton Henderson
  • Jaja Hsu
  • Katie Huber
  • Jack Hughes
  • Nathan T. Jackson
  • Morin Jacob
  • Che Johnson
  • Morgan Johnson
  • Alison Kalinski
  • Gabriella Kamran
  • Meredith Karasch
  • Paul D. Knothe
  • Erin Kunze
  • Megan Lewis
  • Stephanie Lowe
  • Savana Manglona
  • Mark Meyerhoff
  • Pilar Morin
  • Eileen O'Hare-Anderson
  • James Oldendorph
  • Brett A. Overby
  • Jennifer Palagi
  • Jennifer Puza
  • Lars T. Reed
  • Nick Rescigno
  • Jennifer Rosner
  • Daniel Seitz
  • Alexandra Seymour
  • Geoffrey Sheldon
  • Alysha Stein-Manes
  • Cara Strike
  • Ashley Sykora
  • Emanuela Tala
  • Madison Tanner
  • J. Scott Tiedemann
  • Kelly Tuffo
  • La Rita Turner
  • David Urban
  • Stefanie K. Vaudreuil
  • Stacy Velloff
  • Alexander Volberding
  • Brian Walter
  • Alex Wong
  • Oliver Yee
  • Joung Yim
  • Danny Y. Yoo
  • Michael Youril

Latest Tweets

Tweets by @lcwlegal
Liebert Cassidy Whitmore logo

California Public Agency Labor & Employment Blog

Los Angeles
6033 West Century Blvd
5th Floor
Los Angeles, CA 90045
Phone: 310.981.2000
San Francisco
135 Main Street
7th Floor
San Francisco, CA 94105
Phone: 415.512.3000
Fresno
5250 N. Palm Avenue
Suite 310
Fresno, CA 93704
Phone: 559.256.7800
San Diego
550 West C Street
Suite 620
San Diego, CA 92101
Phone: 619.481.5900
Sacramento
400 Capitol Mall
Suite 1260
Sacramento, CA 95814
Phone: 916.584.7000
View Our LinkedIn Profile Subscribe to this blog via RSS Follow Us on Twitter
Privacy PolicyTerms of Use
Copyright © 2023, Liebert Cassidy Whitmore. All Rights Reserved.
Law blog design & platform by LexBlog LexBlog Logo