Disability Compensation under California’s UI Code

By Chris Micheli

California’s Unemployment Insurance Code in Division 1, Part 2, Chapter 4, deals with contributions for disability compensation purposes. Section 2901 provides that each individual performing services for an employer in employment is required to contribute to the Disability Fund the contributions required of each individual.

Section 2901 states that any individual who adheres to the faith or teaching of any bona fide religious sect, denomination, or organization, and in accordance with its creed, tenets, or principles, depends for healing upon prayer in the practice of religion, upon filing with the department and with each of his employers a statement declaring its adherence and dependence and disclaiming any benefits under this part, will be exempt from contributions under this division.

Section 2903 requires the time, procedure, manner of payment and collection of contributions under this part must be in accordance with the provisions of Part 1 of this division.

Article 1 of Chapter 5 of Part 2 of Division 1 deals with the Disability Fund. Section 3001 provides that the Unemployment Compensation Disability Fund is continued in existence as a special fund in the State Treasury, separate and apart from all other public money or funds of this state. The moneys and assets of this fund are to be held in trust by the State Treasurer and administered under the direction of the director exclusively, for the purpose of this part.

Section 3002 says that the State Treasurer is the treasurer of the Disability Fund and must have the custody of all money belonging to the Disability Fund and not otherwise held, deposited or invested under this part. The official bond of the State Treasurer is to cover the faithful performance of his or her duties as treasurer of the Disability Fund. 

Section 3003 states that all surplus money in the Disability Fund may be invested solely in securities and all interest or earnings therefrom are to be deposited in the Disability Fund. Eligible securities for the investment of surplus money are from nine specified bonds.

Section 3004 provides that the Disability Fund consists of all contributions required of individuals with respect to wages paid by employers for employment; all money received for the purpose of disability benefits from the United States of America or any agency thereof, or from any other source; and any property or securities acquired through the use of money belonging to the Disability Fund and all earnings of such money or securities.

Section 3005 specifies that all money received from the Federal Government for disability benefit purposes or for the administration of this part is to be deposited in the Disability Fund in accordance with the terms of the federal grant.

Section 3006 prohibits any further transfer of money from the Unemployment Trust Fund to the Disability Fund.

Section 3008 requires all money to be deposited in the Disability Fund.

Section 3009 provides that refunds, credits, or judgments, and interest thereon, payable for contributions erroneously collected may be paid from the Disability Fund on warrants issued by the Controller under the direction of the director.

Section 3010 states that any amounts determined by the director or his authorized representatives to be payable to employing units or workers as refunds of amounts deposited in the various accounts of the Disability Fund which are unclaimed at the end of three years from such determination, are required to be included in the revenue to the account in the Disability Fund in which they were deposited.

Section 3011 states that, whenever any warrant is drawn on an account in the Disability Fund by the Controller, and the same remains unclaimed after one year, the amount is to revert to that account in the Disability Fund from which the amount was payable.

Section 3012 specifies that all money in the Disability Fund is continuously appropriated for the purpose of providing disability benefits pursuant to this part, including the payment of refunds, credits, or judgments, and interest thereon, the payment of disability benefits to all eligible persons not covered exclusively by an approved voluntary plan, and the payment of the expenses of administration of this part by the department and the Franchise Tax Board. The term “eligible persons” is defined.

Section 3013 provides that a sum to be determined by the Director of Finance, of amounts deposited in the disability fund, may be used for the necessary expenses of administration of this part in addition to any other fund or money available for that purpose.

Section 3014 states that withdrawals by the director from the Disability Fund for the payment of refunds, credits, or judgments, and disability benefits are exempted from the operation of specified provisions in the Government Code.

Section 3015 requires the department to have priority to occupy any space in the buildings and facilities financed by the Disability Fund, which comprise any space in the department’s central office building and related parking facilities in Sacramento and the department’s branch office in Los Angeles, at rental rates not exceeding the cost of providing maintenance and other services.

Article 2 deals with the Disability Administration Account. Section 3051 provides that there is a Disability Administration Account within the Disability Fund. The director may, without at the time furnishing vouchers and itemized statements, withdraw from this account sums not to exceed in the aggregate an amount equal to three percent of the total disbursements made from the fund during the immediately preceding fiscal year to be used as a revolving fund where payment of compensation earned, traveling expense advances, or other cash payments are necessary.

Article 3 deals with the Disability Benefit Payment Account. Section 3075 requires the director to, without presenting vouchers and itemized statements, withdraw from the Disability Fund any sums that he or she deems necessary for the payment of disability benefits for a reasonable future period. The Controller must draw his or her warrant for any claim presented by the director for the payment and the Treasurer must pay the warrant.