California’s employers and employees have had to adapt to several changes in unemployment law in 2024. If you’re unfamiliar with these changes, now is the time to learn. Here are the recent California unemployment law changes that affect how you communicate eligibility, distribute required materials, and calculate unemployment taxes. Staying ahead of these requirements is essential to remain compliant and avoid penalties.
Employers Can Now Inform Employees About Eligibility Via Email
With digital communication now at the forefront, California has modernized its unemployment laws accordingly. Thanks to changes made to Assembly Bill 1355, companies can notify their workers about their unemployment benefit eligibility via email for the next five years.
Here are some key EDD policies that support or relate to email/electronic communication:
SIDES (State Information Data Exchange System)
EDD allows employers to electronically receive and respond to the Notice of Unemployment Insurance Claim Filed (DE 1101CZ) through SIDES E-Response. This means employer communications with EDD on eligibility issues are conducted digitally.Employers who use SIDES will get email notifications when they have a request to respond to. This suggests EDD is comfortable with digital communication in handling claim notices.
How to Participate in SIDES
- SIDES E-Response: This is for employers and TPAs with a lower number of unemployment claims. No special programming or software is needed. Visit Subscribe to SIDES E-Response for more details.
- SIDES Web Service: This is for employers and TPAs with a higher volume of unemployment claims, or who work in multiple states. This option needs the employer or TPA to work with us and the National Association of State Workforce Agencies to set up computer connections for SIDES. Visit How to Participate in SIDES Web Service for more information.
Responding to UI Claim Notices
EDD describes how employers respond to claim notices (DE 1101CZ, DE 1080CZ, etc.).It notes that employers’ responses help EDD determine eligibility, correct errors, or protest wage information.
UI Online / Claim Status & Eligibility
For claimants, EDD sometimes sends emails instructing them to complete an Eligibility Questionnaire online. This shows EDD uses email in the eligibility verification process.This is not exactly employer → employee, but shows EDD’s acceptance of email-based workflows in eligibility steps.
Required Notices & Pamphlets Rule
EDD’s “Required Notices and Pamphlets” page requires that employers notify employees in writing if they are laid off, change status, or take leave. The rule says written notice, but does not strictly define “writing”: it may arguably include email if the employer record logs it.
Workers must first consent to receive their information electronically. Employers are also required to explain how employees can withdraw that consent at any time. If you intend to offer email notifications, ensure you provide employees with both the opt-in process and clear instructions for rescinding their agreement.
Businesses Must Distribute Updated Pamphlets
California recently updated two pamphlets that employers must provide to employees. The new pamphlets are (1) a “Time of Hire Pamphlet” pertaining to workers’ compensation (to be provided at the time of hire) and (2) a “For Your Benefit” pamphlet, pertaining to unemployment insurance (to be provided at the time of an employee’s involuntary termination or leave).
The Workers’ Compensation Time of Hire Pamphlet
The Time of Hire Pamphlet, produced by the California Department of Industrial Relations (DIR), was revised on February 1, 2024. It must be given to all newly hired employees in the state of California.The Time of Hire Pamphlet provides employees with information about what workers’ compensation is, what benefits are provided, what an employee should do in the event they are injured, and information about medical care, among other information related to the state’s workers’ compensation system.
The For Your Benefit Pamphlet
The California Employment Development Department (EDD) publishes the DE 2320—For Your Benefit: California’s Program for the Unemployed (FYB) to explain employees’ rights to unemployment insurance, disability insurance, and paid family leave. It was revised in January 2024 and must be furnished to California employees when they are discharged, laid off, or placed on a leave of absence.
The FYB pamphlet, which must be provided no later than the effective date of the termination, provides employees with information. That when to apply for benefits, what they need to apply, how to apply, waiting periods, and paid family leave, among other things.
Other State Pamphlets
While this is not an exhaustive list, employers should be aware of other pamphlets to provide to employees at the time of hire, including:
- State disability insurance provisions. Employers must provide the EDD’s Disability Insurance Provisions pamphlet, DE 2515.
- California paid family leave. Employers must provide the EDD’s Paid Family Leave insurance pamphlet, DE 2511.
- Sexual harassment fact sheet. California employers must provide employees with information about sexual harassment, either through the fact sheet provided by the Civil Rights Department, or in another writing.
- Rights of victims of domestic violence, sexual assault, and stalking pamphlet. California employers must provide new hires with a written notice about the rights of victims of domestic violence, sexual assault, and stalking to take protected time off for medical treatment or legal proceedings.
Required Pamphlets and Notices
California’s “Required Notices and Pamphlets” list (maintained by EDD) includes:
- UI, DI, and PFL – Notice to Employees (DE 1857A) (PDF)
- UI only – Notice to Employees (DE 1857D) (PDF)
- DI and PFL only – Notice to Employees (DE 1858) (PDF)
- For Your Benefit pamphlet (DE 2320)
Employers should also give their workers this pamphlet if they decide to take an extended leave of absence. Businesses must give their employees this information on the dates of their dismissals, at the very latest, so that workers have the guidance they need to take their next steps.
The Unemployment Insurance Tax Got a Boost
A third change is a boost in unemployment insurance tax. Because of the debt that California accumulated while paying unemployment insurance during the COVID-19 pandemic. The state has hiked the unemployment tax that businesses must pay to $21 for each employee. Employers will pay more as the years go on, allowing the state to form a robust safety net for unemployed workers. This will ensure people have access to the benefits they need during periods of joblessness.
Alongside procedural changes, significant updates to unemployment insurance (UI) tax rates and structures have been implemented. These adjustments impact employer payroll liabilities.
New Rates for 2025
Consulting the EDD’s Contribution Rates and Withholding page reveals:
- UI Tax Rate: New employers start at 3.4% for two to three years. After that, rates range from 1.5% to 6.2%, depending on experience and an added 15% emergency surcharge under Schedule F+.
- ETT Rate: 0.1% on the first $7,000 of wages.
- SDI Rate: Withholding rate of 1.2%, and beginning January 1, 2024, all wages are subject to SDI, with no wage cap.
- The taxable wage base for UI and ETT remains at $7,000 per employee per year.
For a comprehensive breakdown of how these rates are calculated and applied, review DED 2025 Payroll Tax Guide (DE 44 Rev. 51).
Impact on Employers & Strategy
- Employers with higher turnover or more UI claims may face higher rates due to their experience rating.
- The emergency surcharge inflates baseline rates — making budgeting for UI costs more critical.
- Those purchasing a business with employees may have the option to retain the previous owner’s UI tax rate under certain conditions.
According to the EDD Tax-Rated Employers page:
- You have a 60-day window after receiving your rate notice (DE 2088) to protest any discrepancies.
- So if you believe your rate assignment is incorrect (for instance, due to misapplied experience charges), you must act quickly.
As of 2025, the unemployment insurance rate for new employers begins at 3.4%, while experienced ones span 1.5% to 6.2%, so it’s vital to check the latest EDD rate schedule each December.
Conclusion
By staying up to date on these changes, California businesses can actively demonstrate compliance with state law. While employees gain direct access to the full benefits offered under the unemployment insurance system. Pershing Square Law Firm can provide additional guidance on unemployment law. Our unemployment lawyers in California have extensive experience helping clients with issues such as the wrongful denial of unemployment benefits.