Generally, an employee is disqualified from unemployment benefits if that employee leaves employment volunatrily (resigns) without "good cause". A claimant who has a compelling reason for leaving employment or who was discharged or laid off for lack of work, but leaves voluntarily earlier than the circumstances reasonably required, leaves employment voluntarily without good cause and will be disqualified from unemployment benefits. (Precedent Decisions P-B-27, 37, 39, 228 & 242).
In general "good cause" is such a cause as would, in a similar situation, reasonably motivate the average able-bodied and qualified worker to give up his or her employment with its certain wage rewards in order to enter the ranks of the unemployed. Evenson v. CUIAB (1976).
Thus, under the law, demotion with significant wage reduction is usually not good cause of quitting a job, unless the reduction is so drastic that it reduces the employee's wages in a way that reasonable leaves him know choice but to quit. Further, the law is clear that if you resign before you are laid off or terminated, even when you know for sure you will, you will likely be disqualified from benefits.
It is strongly recommended that you counsult with an experienced employment attorney before you make the decision to quit your job to make sure that you explored all the options available to you under your circumstances to maximize your chances of eligibility for unemployment benefits.
Under the law, an individual who is otherwise qualified for unemployment benefits is not eligible to collect those benefits during the priod of time when he was unavailable to work. This means that if you become unable to work for a few days or a few weeks while collecting unemployment, you must report it on your weekly claim form (there are specific questions on that form that inquire into your health condition and your ability to work).
This is especially important if you are filing for any kind of disability benefits. If EDD finds out that you collect both unemployment benefits and disability benefits, they will charge you with fraud and will demand repayment of unemployment benefits in addition to penalties. As soon as you apply for any kind of disability benefits, you should either stop filling out weekly unemployment benefits claim forms or at the very least point out on your claim forms that you are unable to work due to your medical condition.
One of the most common ways that employer tries to fight their former employee's claim for unemployment insurance benefits is arguing that the employee was terminated due to misconduct. Misconduct in the context of unemployment insurance code is a term of art, and understanding its legal definition is crucial to appealing the denial of unemployment benefits at the appeals board if your initial claim has been denied.
Under California Unemployment Insurance Code section 1256 "an individual is disqualified for unemployment compensation benefits if the director finds that he left most recent work voluntarily without good cause or that he has been discharged for misconduct connected with his most recent work."
The standard for showing "misconduct" within the meaning of unemployment benefits eligibility is quite high and thus favoring applicants for those benefits. While such gross violations as violence or threats of violence at workplace and clear grounds for disqualification from unemployment insurance benefits, many of the less grave issues at work do not constitute misconduct. Thus, employee's mere inefficiency, unsatisfactory conduct, ordinary negligence, or good faith errors in judgment at work are not "misconduct," that will disqualify that employee from receiving unemployment compensation. In this context, the term "misconduct" is limited to conduct evidencing such willful or wanton disregard for an employer's interest as is found in deliberate violations or disregard of standards of behavior which employer has right to expect of his employee, or in carelessness or negligence of such degree, or recurrence as to manifest equal culpability, or to show an intentional and substantial disregard of employer's interest or of employee's duties and obligations to his employer.
Even refusal to perform work as directed does not always rise to the level of misconduct that disqualifies an employee from benefits. In one case, the nurse willfully refused to perform work because her consultations with outside authorities led her to conclude that health of patient would be jeopardized if she following her superiors' direction. Because her refusal to perform was out of reasonable and good faith fear of harm to others, she was entitled for unemployment insurance benefits after she was discharged for repeated refusals to follow her employer's orders.
Likewise, an employee's unauthorized departure from work did not constitute misconduct causing his discharge within the meaning of unemployment insurance code where the employer testified that it's the employee's inappropriate language following the confrontation on the day following the unauthorized departure and not the departure itself was the sole cause of his discharge.