Posted on June 27th, 2019
Below is a full transcript of this video.
What’s going on fellow entrepreneurs. It’s John Fagerholm again from Metal Law Group and today I want to talk about EDD claims.
I get a lot of calls and I do a lot of consultations related what to do if an ex-employee files an EDD claim and my basic answer is don’t do anything because if they were your employee, you should have been paying into that insurance.
So EDD has a pot of money that’s saved up for these types of claims and it’s a pot of money that you’ve been paying into for, however many years.
So typically what happens when there’s an EDD claim is that you’ll get a notice from the EDD that this former employee made this claim and then it’ll ask you some questions.
I typically just tell my clients not to bother with it. It’s not up to you anyway. It’s up to the EDD whether they get unemployment or they don’t get the unemployment.
You know, what typically happens is, when you challenge an unemployment claim, then the ex-employee gets upset and then they file a labor board claims and then it just ends up costing you more money.
A lot of times you’ve fired the employee, so you feel like you need the challenge this or whatever it is. But I say unless there’s something in that document that that’s wrong, completely wrong, I wouldn’t challenge it cause it just triggers more claims and the EDD will either give it to them or won’t give it to them based on whatever criteria they’re using anyway.
So I just don’t see the point in challenging it. Every once in a while though, you’ll have some ex-employee that or write something like I was fired for, I was sexually harassed and then I was fired when I complained about it.
Something like that, then, of course, you need to challenge that because that then becomes public record and if they later sue, then they can subpoena those documents and say, look, you had notice that they had indicated this and you didn’t challenge it back then.
So not an admission of guilt by any stretch of the means, but it’s at least one piece of evidence against you. So better to challenge it.
The other times that I think you challenge it is if it’s an independent contractor that then files an unemployment claim, then you should challenge it.
However, be very careful because in California, almost nothing is an independent contractor anymore, and I’ve made several of those videos. So when you then go in and challenge it, it triggers other issues related to misclassification.
So anyway, those are my thoughts on EDD claims. I think you don’t challenge them unless you absolutely have to and like I said, it’s insurance. You’ve already paid into it. It’s not going to cost you any more, if you’ve been paying into it.
If you haven’t paid into it, that’s a whole different issue altogether.
All right. Till next time.
