Miscellaneous MI 35

Assessing and Removing Non-monetary Disqualifications

This section discusses Department policy for assessing and removing non-monetary disqualifications. For information regarding when to assess a disqualification, see the appropriate BDG section covering the issue. For information regarding how to assess or remove a disqualification, refer to FOM Determinations and/or the UI Manual. For information regarding the criteria for taking workload count for removing disqualifications, see FOM Determinations .

A. General

A written disqualification (Notice of Determination or Determination/Ruling, DE 1080) is the method by which a claimant is formally denied benefits for failure to meet certain standards established by the Unemployment Insurance (UI) Code or its implementing regulations, Title 22.

All disqualifications must be in writing so the claimant knows exactly why benefits are not payable and what the individual can do if he or she does not agree with the decision. These requirements are part of what is collectively known as "procedural due process." See PR 20 for a complete discussion of "due process."

B. Assessing Non-Monetary Disqualifications

A disqualification may be assessed for either a definite or indefinite period:

A disqualification is assessed when the claimant has failed to meet the requirements of one or more sections of the UI Code. The authority for assessing disqualifications is the UI Code section under which the claimant is disqualified.

1. Section 1252 and Section 1279

Section 1252(a) UI Code provides:

"An individual is "unemployed" in any week in which he or she meets any of the following conditions:

1. Any week during which he or she performs no services and with respect to which no wages are payable to him or her.
2. Any week of less than full-time work, if the wages payable to him or her with respect to the week, when reduced by twenty-five dollars ($25) or 25 percent of the wages payable, whichever is greater, do not equal or exceed his or her weekly benefit amount.
3. Any week for which . . . he or she would be eligible for benefits under Section 1253.5.
4. Any week during which he or she performs full-time work for five days as a juror, or as a witness under subpoena."

The amount of holiday pay is also considered when determining whether the total wages for the week in which a holiday(s) occurs are excessive earnings (XE) and thus whether the claimant is "unemployed" as defined in Section 1252 of the Code. If all of the wages in the week the holiday occurs (including the holiday pay) are XE, the holiday pay is considered wages for that week.

Section 1279(a) of the UI Code provides:

1. The amount of wages in excess of twenty-five dollars ($25) payable to him or her for services rendered during that week.
2. The amount of wages in excess of 25 percent of the amount of wages payable to him or her for services rendered during that week."

Section 1279 (c) of the UI Code defines "wages" as including any and all compensation for personal services whether performed as an employee, independent contractor, juror, or witness, but does not include payments made by a city to an elected official as an incident to public office, or any payment received by a member of the National Guard or reserve component of the armed forces for inactive duty training, annual training, or emergency state active duty.

Generally, a WGS or DED disqualification is for a past period of time. However, under some limited circumstances, a disqualification may be assessed either definitely or indefinitely into the future if it is obvious that the claimant will continue to be in receipt of the disqualifying monies.

A future definite disqualification would be assessed when the claimant is, for example, in receipt of in-lieu-of-notice pay. The disqualification would be for the period of time covered by the in-lieu-of-notice pay.

A future indefinite disqualification is discussed in P-B-140. The claimants operated a food concession business that traveled with carnivals and fairs. They incorporated their business and were the sole stockholders. The concession was seasonal, lasting as long as nine months of the year. During the off-season, the wife handled the correspondence; and the husband handled any contracting for services and oversaw repair, cleaning, and remodeling of equipment. Neither elected to draw a salary during the off-season. In its decision denying benefits, the Board stated:

This disqualification would remain in effect until the claimant is no longer a sole stockholder and corporate officer in the business.

2. Section 1253(a) - Failure to Comply With Regulations (IRR)

UI Code Section 1253(a) provides a claimant is eligible only if a claim for benefits with respect to that week has been made in accordance with authorized regulations. The disqualification can be definite or indefinite, depending upon the circumstances.

There are two disqualifications possible under Section 1253(a):

• Failure to comply with Title 22, California Code of Regulations, Sections 1326-1 through -12, and
• Failure to provide the alien identification (A) number and/or failure to submit Immigration & Naturalization Service documents for verification, California Code of Regulations, Title 22, Section 1326-13(c)(2).

3. Section 1253(b) - Not Registered (NR)

UI Code Section 1253(b) provides an unemployed individual is eligible to receive unemployment compensation benefits with respect to any week only if the director finds that:

Benefits are denied beginning with the Sunday of the week that the claimant was required to add or update a resume in the Job Service’s CalJOBS system and continuing until the week the claimant adds or updates an unsuppressed resume in CalJOBS.

Section 1253 (b) is also used to assess a disqualification when the claimant does not report to the Local Workforce Investment Area (LWIA) as agreed upon in his or her reemployment program.

4. Section 1253(c) - Able & Available (AA), Religious Holidays (RH), Special Provisions, and Part-time Work Restrictions Under Section 1253.8

Able & Available (AA)

Section 1253(c) of the UI Code provides an unemployed individual is eligible to receive unemployment compensation benefits with respect to any week only if the director finds that:

A disqualification for the claimant’s unavailability for work may be either definite or indefinite. If, at the time of the determination interview, the claimant can demonstrate that the disqualifying condition(s) (i.e., the condition(s) which made him or her unable or unavailable for work) have ended, the disqualification will be assessed for a definite period. If, however, at the time of the determination interview the disqualifying conditions have not ended, the disqualification will be assessed for an indefinite period.

An AA disqualification cannot be assessed retroactively unless one of the following conditions is met:

• Weeks have been paid as a result of a disqualifying false statement, or
• There is an overlap between UI and DI benefits paid.

With the exception of retroactive disqualifications, the effective date of an AA disqualification is the beginning of the first week claimed, but unpaid, in which the availability issue exists.

NOTE: Not applying AA disqualifications retroactively is a policy of the Department; there is no statutory authority covering the procedure.

Religious Holidays (RH)

The provision for "religious holidays" is not addressed in either the Code or the regulations; it is an outgrowth of an appellate court case.

In Jaffe v. California Unemployment Insurance Appeals Board, the claimant was unavailable for work for two days of a week due to observance of religious holidays in accordance with the dictates of his faith. The court refused to apply the Sanchez criteria to Mr. Jaffe’s situation because of the appearance of state involvement in the payment of benefits for religious reasons, forbidden by the Establishment Clause of the First Amendment to the United States Constitution.

On the other hand, a denial of benefits based on religious reasons appeared to violate the Free Exercise of Religion Clause of that same amendment. The Court of Appeal, therefore, fashioned a remedy to accommodate the competing interests: Payment of 5/7 of the weekly rate for the five days the claimant was available for work, and denial of 2/7 of the weekly rate for the two days the claimant was not available for work. The court held:

An RH disqualification may be applied only to known days in weeks that are already completed, and cannot be projected into the future.

Special Provisions

Certain AA issues have special provisions that are addressed in separate code sections. When these sections apply to the issue under consideration, they supersede Section 1253(c). These code sections and their subjects are:

Incarceration - Section 1253.1 provides:

Death in Immediate Family - Section 1253.12 provides:

Days Off and Holidays - Section 1253.2 provides:

Jury Duty or Subpoena - Section 1253.6 provides:

Part-time workers - Section 1253.8:

If the claimant is restricting his/her availability to part-time work, before adjudicating the AA issue, you must determine if the claimant meets the part-time work criteria under UI Code Section 1253.8 (refer to BDG AA 5 for a complete discussion of the part-time work criteria).

If the claimant meets the part time work criteria under UI Code Section 1253.8 then:

• No further investigation is necessary.
• The claimant would be approved for part-time work regardless of the reason why the claimant is restricting his/her availability.

If the claimant does not meet the part-time work criteria then:

• The claimant’s eligibility would be determined under UI Code Section 1253(c).
• Continue with fact finding.

NOTE: If the part-time able and available issue involves weeks prior to December 29, 2001, the provisions of this Section 1253.8 would not apply. In these cases the claimant would have to meet the requirements of availability under Section 1253 (c) (unless the claimant is restricting to part-time work due to school attendance if so, refer to BDG AA 40 for additional information).

5. Section 1253.5 - Benefit Reduction (BR)

A claimant’s ability to work may be determined under either Section 1253(c) or 1253.5. The determining factor is how many days the claimant could have worked during the week claimed. If the claimant was unable to work all 7 days of a week, he or she would be disqualified under 1253c. If, however, the claimant was able to work for at least one day during a week, then he or she should have a benefit reduction for the days he or she was unable to work. Section 1253.5 provides:

A BR disqualification cannot be assessed retroactively unless weeks have been paid as a result of a disqualifying false statement, OR there is an overlap between UI and DI benefits paid.

NOTE: Not applying BR disqualifications retroactively is a policy of the Department; there is no statutory authority covering the procedure.

6. Section 1253(e) - Efforts to Seek Work (ESW)

Section 1253(e) provides an unemployed individual is eligible to receive unemployment compensation benefits with respect to any week only if the director finds that:

If the claimant fails to follow the office’s specific and reasonable instructions, the claimant is subject to disqualification.

An ESW disqualification cannot be assessed retroactively unless the claimant was paid benefits as a result of a disqualifying false statement.

NOTE: Not applying ESW disqualifications retroactively is a policy of the Department; there is no statutory authority covering the procedure.

Since it cannot be determined whether or not a claimant has made an adequate search for work during a week until the week is completed, an ESW disqualification cannot be issued for future weeks.

7. Section 1255.5 - Workers’ Compensation (WC)

Section 1255.5 of the Code provides:

Section 1255.5 also provides an exception to the general rule:

Only the claimant who is in receipt of temporary total Workers’ Compensation or Vocational Rehabilitation Maintenance Allowance is affected by this section. The claimant in receipt of permanent disability is not subject to benefit reduction.

Since the benefit reduction is applicable for as long as the claimant is in receipt of the temporary total disability compensation or vocational rehabilitation allowance, a disqualification may be projected into the future if it is determined the payment will last for an indefinite period of time.

8. Sections 1256/1260(a) - Voluntary Quit (VQ) and Misconduct (MC)

Section 1256 provides:

Note that only the last employment at the time the claim is filed may result in disqualification. VQ and MC disqualifications are, therefore, issued as of the Sunday of the week in which the disqualifying conditions occur. VQ and MC are two of the four disqualifications that may have an effective date before the effective date of the claim; see also TOX and SW.

Under the provisions of Section 1260(a), once a VQ or MC disqualification is assessed, the claimant must return to work and earn five times his or her weekly benefit amount in bona fide employment and reopen the claim. The disqualification will remain in effect until the requirements have been met.

9. Section 1256.5 - Intoxicants (TOX)

Section 1256.5(a) of the Code provides:

The beginning date of the TOX disqualification is the Sunday of the week in which the disqualifying conditions occur. The disqualification will remain in effect until conditions for removing the disqualification have been satisfied.

10. Sections 1257(a)/1260(c) and (d) - False Statement (FS), and Sections 1263(a) and 1263(b) - Conviction (CV)

There are two sets of rules for false statement disqualifications. The applicable set of rules depends upon whether the disqualification is imposed by a field office or as a result of court action.

Penalty Imposed by Field Office

Section 1257(a) of the UI Code provides an individual is disqualified for unemployment compensation benefits if:

Section 1260(c) of the UI Code provides:

A disqualification assessed under Section 1257(a) of the UI Code is effective with the Sunday of the week in which the Notice is issued. The disqualification remains in effect until served or three-years from the mailing date, whichever comes first.

False statement disqualifications may be assessed for variable periods of time depending upon whether or not benefits have been improperly paid as a result of the false statement.

Section 1260(c) of the UI Code also provides:

Section 1260(d) of the UI Code provides:

Penalty Resulting From Conviction

Section 1263(a) of the UI Code provides:

The 52-week forfeiture period is served by the passage of time beginning with the week in which the criminal complaint was filed. The claimant does not need to be "otherwise eligible" during this period.

Section 1263(b) of the UI Code provides:

Section 1263 (e) provides that disqualifications assessed under Sections 1260, 1261, or 1263(b) may be served during the 52-week forfeiture period, providing the claimant is "otherwise eligible." But no week during the period of forfeiture shall be used to offset the amount of any overpayment.

11. Section 1257(b) - Suitable Work (SW)

Section 1257(b) of the UI Code provides an individual is also disqualified for unemployment compensation benefits if:

Section 1260(b) of the UI Code provides:

A disqualification for refusal of suitable work begins the week in which the disqualifying act occurred if the claimant was registered for work with the Job Service or filed a claim that week. Otherwise, the disqualification begins the first day of the week in which the claimant registered for work or filed a claim.

Suitable work disqualifications may only be assessed for weeks prior to the filing of the claim if there is a causal relationship between the refusal of work and the claimant’s current unemployment (see BDG SW 5 D for a complete discussion).

12. Section 1261 - Successive Disqualifications (SD)

Section 1261 of the UI Code provides:

The only disqualifications which may be extended under Section 1261 are those assessed under Sections 1257(a) and (b), FS and SW. This additional period is added to the end of the FS or SW disqualification to extend the effect of the disqualification.

13. Section 1262 - Trade Dispute (TD)

Section 1262 of the UI Code provides:

A trade dispute disqualification generally begins with the effective date of the claim (if the claimant filed during the course of the trade dispute) and lasts as long as the claimant is unemployed because of the trade dispute.

14. Section 1253.3 - School Employee (SCH) and Section 1253.4 - Athlete (ATH)

Both sections contain provisions for present denial of benefits based on the claimant’s employment status during the base period of the claim if there has been employment in the immediately prior term or season and there is a "reasonable assurance" of performing such services in the next successive term or season.

School Employee (SCH)

UI Code Section 1253.3(b) provides:

Subsection (d) extends the disqualifying provision of Section 1253.3 to established and customary vacation periods and holiday recess periods.

Claimants who are assessed a SCH disqualification may, despite any "reasonable assurance" for the next term, qualify for benefits based on non-SCH wage credits. The SCH disqualification is still assessed, but, a quasi-award benefit is computed based on the remaining non-SCH wages.

Athlete (ATH)

UI Code Section 1253.4 provides:

Once assessed, the SCH or ATH disqualification remains in effect so long as the claimant has the "reasonable assurance."

15. Section 1255.3 - Prior Work Pension (PWP)

Section 1255.3(a) of the UI Code provides:

The disqualification for PWP starts with either the effective date of the claim or the effective date of the periodic pension payment, whichever is later. The disqualification remains in effect as long as the claimant is in receipt of the pension payment.

C. Removing Nonmonetary Disqualifications

Since fixed disqualifications that are assessed for one or more past weeks generally do not pose a problem for the interviewer, this section is limited to discussing removing disqualifications that, from the perspective of the interviewer, extend into the future. Other methods of terminating disqualifications, such as expiration through passage of time, Redetermination or Reconsideration, and ALJ, Appeals Board, and court "setting aside" or reversals, are also not discussed in this Section (see Determinations FOM, Appeals Manual, or the UI Manual).

There are three methods of removing disqualifications: "lift," "serve," and "purge."

"Lifting" the Disqualification

To "lift" a disqualification, the claimant need only remove the cause of the disqualification itself and report to reopen the claim. The disqualification is generally lifted effective with the Sunday of the week in which the claimant reports with whatever information may qualify to lift the disqualification. However, if the condition causing the disqualification extends into the week in which the claimant reports, the disqualification would be lifted effective the following Sunday.

Another exception is Section 1253b lifting the disqualification during the week the condition no longer exists. Section 1253b provides for lifting a disqualification the Sunday of the week the claimant registered for work by adding or updating an unsuppressed resume in CalJOBS.

UI Code Sections for which disqualifications may be "lifted" are:

• Sections 1252/1279 - WGS/DED
• Section 1253(a) - IRR
• Section 1253(b) - NR
• Section 1253(c) - A &A
• Section 1253.3 - SCH
• Section 1255.5 - WC
• Section 1256.5 - TOX
• Section 1262 - TD

"Serving" the Disqualification

The only disqualifications that must be served are those issued for false statement (FS) and a false statement successive disqualification (SD).

"Serving" consists of certifying for benefits for the prescribed number of weeks during which the claimant is "otherwise eligible." Any week that the claimant is not "otherwise eligible" cannot be used as credit toward the disqualification. Any unserved weeks remain on the disqualification until all weeks have been served or three years has passed from the beginning date of the disqualification.

"Purging" the Disqualification

A disqualification is purged when certain requirements, called for by the Code, have been accomplished by the claimant. Specific disqualifications may be purged in the following manner:

Sections 1256 (1260[a]) - VQ and MC

A disqualification assessed under Section 1256 may be purged only if the claimant has returned to work in bona fide employment and earned at least five times his or her weekly benefit amount after the act that resulted in the disqualification.

Section 1256.5 - TOX

A TOX disqualification may be satisfied by either a purge or a lift. The disqualification may be purged with work and earnings, under the same standards given above for VQ and MC, or it may be lifted by a certification from a physician or authorized treatment program administrator that the claimant has entered into, or is continuing in, a treatment program or facility and is able to return to work.

It should be noted that the claimant’s enrollment in a treatment program or facility is considered confidential and shall not be divulged to an employer.

Section 1262 - TD

A trade dispute disqualification may be purged by subsequent employment, permanent replacement, formal abandonment of the trade dispute by any one of the principals in the dispute, deauthorization or decertification election, or satisfactory resolution of the issues in dispute. Refer to BDG TD for discussion of each of these methods of purging a disqualification.

D. Denying Removal of a Disqualification

If the claimant has not met the requirements to "lift," "serve," or "purge," the disqualification, the disqualification cannot be removed.

Denying a "Lift": If the claimant has not taken the affirmative steps required to lift the disqualification or the disqualifying reasons are otherwise still in effect, the disqualification is reissued as of the date of the claimant’s request. The denial is issued on the basis of the reason for the failure to meet the qualification for lifting, rather than for the reason the original disqualification was issued.

Denying a "Serving": The claimant under an FS disqualification who is not "otherwise eligible" may be denied the ability to serve the disqualification (except for a concurrent SW disqualification). The denial of credit for the FS disqualification is issued on the basis of the reason for the disqualification which results in the claimant being "otherwise ineligible." By issuing the latter disqualification, the claimant is advised that he or she is not "otherwise eligible" and those weeks cannot be used against the FS disqualification.

Denying a "Purge": A claimant’s request to purge a previously assessed disqualification is denied when the requirements for purging the disqualification have not been met. The denial describes the reason(s) why the claimant failed to meet the necessary criteria; it does not address the basis for the original disqualification.

E. Bona Fide Employment

Title 22, Section 1260(a) -1(b), provides in part:

The basic test to determine whether employment is "bona fide" to purge a disqualification under Section 1256 of the code is whether the total facts lead reasonably to a conclusion the individual was in good faith genuinely attached to the labor market. An individual was not engaged in bona fide employment, however, if he or she admittedly worked for the sole, primary, or dominant purpose of avoiding and purging a disqualification under Section 1256 of the code. No fixed rule can govern when employment is "bona fide," but the following factors shall be considered by the department:

1. The manner in which the employment was obtained, and the nature and extent of the claimant’s search for work.
2. Whether the employment was in the regular course of the employer’s business.
3. Whether the employer had previously hired someone for the job, and whether someone was hired for the job after the claimant asserting purging relief was separated from the job.
4. Whether the employment was in the claimant’s usual occupation.
5. Whether the wages for the employment were equivalent to the claimant’s wages in his or her usual occupation or last preceding employment.
6. Whether the claimant is willing to accept future employment of the same kind and under the same conditions as the employment asserted as the purging employment.
7. The claimant’s reasons for accepting the employment, the length of the employment, and the reasons for the termination of the employment.

Regarding self-employment, Title 22, Section 1260(a) -1(c), provides in part:

Since many of the points listed above overlap in our case law, they are broken into larger areas of discussion below:

Manner in Which the Employment Was Obtained

Work for relatives is generally suspect and requires careful fact-finding. Even though the claimant may be aided in finding employment, or directly employed by, a relative does not automatically mean that the employment is not bona fide.

In P-B-72, the claimant was disqualified on the basis that she had voluntarily quit her last employment. After filing a claim, she made an extensive search for work as a general office clerk, her occupational classification. She had prior experience at a manufacturing plant doing typing, filing, ordering supplies and answering the telephone after school and full time during the summer. Since she was familiar with the employer’s procedures, she was offered work for the same manufacturing plant doing work similar to what she had done in the past. Her father was president of, and a stockholder in, the company.

The claimant’s former employer appealed the modification of the disqualification, contending that the claimant’s subsequent employment was not bona fide because it was performed outside the geographic area where the claimant normally worked and, as such, did not indicate a genuine reentry into the labor market. He felt it was significant that she applied for employment with her father on June 3, one day after the disqualification had been issued by the Department.

The Board found that the services performed were similar to those she had performed in the past for other employers; her services were needed due to an increase in the employer’s business; her wage was reasonably suited to her competence level; she expected the job to be permanent; the job extended beyond the point where she met the purge requirements; and it was only because of her desperate financial situation that she had contacted her father. The Board stated:

Employment Entered Into Only to Purge a Disqualification

As provided in Title 22, Section 1260(a) -1(b), if the claimant admittedly worked for the sole purpose of purging a Section 1256 disqualification, the employment is not considered bona fide for purposes of purging the disqualification.

Example: The claimant was disqualified for benefits as a result of her reason for separation, and attempted to find work as a commercial artist in an advertising firm, her usual occupation. Unsuccessful in her attempt, she then contacted her brother who, with his wife, owned and operated a small neighborhood grocery store which normally had no other employees. The claimant’s brother agreed to hire her for one week so that she could lift the disqualification and qualify for benefits. Her rate of pay was considerably less than she was used to receiving as a commercial artist. The employment was the result of collusion, and as such, was not bona fide.

Even if collusion did not exist (i.e., the brother would have hired someone else due to an increase in business), if the claimant took the job solely to purge the disqualification with no intention of continuing in such employment, the employment would not be considered bona fide for purposes of purging a disqualification.

Employer Does Not Normally Hire and Will Not Do So Again

Employment for an employer who does not normally employ anyone, and will not again, may not be bona fide employment to purge a disqualification.

Example: The claimant, a live-in cook and housekeeper, was disqualified under Section 1256. The claimant told her story to a sympathetic neighbor, who agreed to hire the claimant to cook a dinner for a party. The neighbor would normally have cooked the dinner herself but for the claimant’s need for the income and the neighbor’s wish to help. Several of the ladies at the party enjoyed the meal and arranged with the claimant to cater their dinner parties, which were usually catered by a local business. The claimant did so. Although the neighbor’s employment may not have been bona fide, the claimant’s subsequent employment was because the employers regularly hired someone else to do the cooking at their dinner parties. Additionally, the employment was similar to the claimant’s regular occupation, she was willing to continue in such employment, and her reason for accepting the work was to support herself, rather than to purge a disqualification.

Employment in the Claimant’s Usual Occupation

If the claimant has worked in other than his or her usual occupation, in and of itself, is not sufficient to deny the purge.

Example: The claimant, a construction laborer, is disqualified for leaving his last employment. It is winter and the construction industry cannot reemploy him quickly. He looks for work in related fields, but weather conditions are such that he cannot find work. Eventually he is offered temporary work in a lumberyard until an employee, on sick leave, returns. After several weeks the former employee returns and the claimant is laid off. He is eligible for recall in the event the employer has need of his services in the future. Although the claimant has not been working in his usual occupation, the employment is bona fide. The claimant had exhausted all possibilities in his usual occupation, the employment was entered into for economic reasons and not solely to purge the prior disqualification, he is willing to accept recall in the future, and is willing to work for the wage offered.

Common Law Employment Relationship

Occasionally the employment status of a claimant may be questionable. Determining whether an individual is an independent contractor or an employee may occur in occupations such as, real estate salesperson, home health care professional, computer consultant, artist, and newspaper distributor.

Title 22, Section 4304-1 provides in part:

As discussed in FOM Determinations, employer-employee relationship (i.e., employment status) cases must be resolved by the Employment Tax District Office, otherwise the Department may be prevented from assessing taxes on the disputed wages.