Miscellaneous MI 70

Professional Athlete Claims

A. General

Section 1253.4 of Calif. Unemp. Insurance Code provides:

Unemployment compensation benefits, extended duration benefits and federal-state extended benefits shall not be payable to any individual on the basis of any services, substantially all of which consist of participating in sports or athletic events or training or preparing to so participate, for any week which commences during the period between two successive sports seasons, or similar periods, if such individual performed such service in the first of such seasons, or similar periods, and there is reasonable assurance such individual will perform services in the later of such seasons, or similar periods.

Therefore, for the provisions of Section 1253.4 to be applicable, the following criteria must be present:

1. Substantially, all of the claimant’s services performed during the base period were as a sports participant, or training/preparing to participate.

2. The claimant performed "athletic" services in the prior season and is under contract to perform similar services in the succeeding season or has reasonable assurance of performing similar services the following season.

When an individual completes the season and his or her contract terminates, there is "reasonable assurance" so long as the individual affirmatively offers services as an athlete to the employer(s) and there is a strong indication that an employer(s) is intending to employ the individual.

Generally, the individual will be the best judge of whether he or she has a "reasonable assurance" of performing next season. Unless the individual’s assessment is inherently improbable, it will be accepted. For instance, a sports figure whose performance last season was outstanding is likely to have assurance of playing next season; any statement to the contrary should be examined closely.

3. Benefits are claimed for weeks commencing between successive sport seasons or similar periods in which the claimant will have performed as an athlete.

The dates of the "season" and of the "recess" period should be confirmed with the claimant or the employer to verify that benefits are being claimed "between two successive sports seasons."

B. Services Subject to Section 1253.4

An individual shall be deemed to have performed "substantially all" services in sports or athletic events if he or she engaged in such activities for 90 percent or more of the total time spent in the base period in performance of all covered services.

If substantially all of a claimant’s base period services were as an athletic participant (including training or preparing to participate), then all base period wages are subject to the special provisions of Section 1253.4. "Athletic participant," as used here, refers to actual players, not auxiliary personnel such as managers, trainers, umpires, referees, groundskeepers, etc.

If less than 90 percent of a claimant’s base period services were as a sports participant, there is no prohibition under Section 1253.4 on paying benefits based on all of the claimant’s base period wages.

Example:

One month into the basketball season, a player suffered injuries that precluded performing services that season as a player, but continued with the employer in a public relations capacity. During the off-season the player was employed by an automotive company, then filed a claim following layoff. He indicates that his injuries have healed and that he has tentative offers to play in the coming season. Since less than 90 percent of the claimant’s time during the base period involved performance as an athlete, Section 1253.4 does not apply despite the fact that the claimant will perform services as an athlete in successive seasons.

The principal application of Section 1253.4 will obviously be to professional athletes employed in team sports such as soccer, baseball, football, basketball, hockey. It is equally applicable, however, to any sports participant both major and minor leagues, professional or semiprofessional, provided such athletic services constituted at least 90 percent of the claimant’s activities during the base period.

C. Change of Status

Occasionally, a claimant held ineligible under Section 1253.4 because of anticipated sports employment in the coming season, finds such employment does not materialize. Section 1253.4 makes no specific provision for reconsidering the prior disqualification in such cases. If appropriate, however, such reconsideration could be made under Section 1332(a).

In other instances, a claimant who was initially held eligible under Section 1253.4 because reemployment as an athlete seemed doubtful, subsequently is assured of "playing" in the coming season. Once assured of sports reemployment, no further payment can be made during the off-season.

D. Section 1253.4 Distinguished From Section 1252

In dealing with claims filed by professional athletes, an interviewer must consider eligibility under both Sections 1252 and 1253.4.

A claimant under long-term contract as a professional athlete may or may not be eligible under Section 1252 during the off-season depending upon the terms of his or her contract. If the claimant’s contract requires no services during the off-season (including being on call) and the claimant is free to do whatever he or she wants during the off-season, the individual would be considered unemployed for unemployment insurance purposes and any payments received during the off-season would be allocated to when services were performed. (See BDG TPU.)

Application of Section 1253.4 is not dependent upon a finding of ineligibility under Section 1252. Nor does a finding of ineligibility under Section 1252 automatically mean disqualification under Section 1253.4.

Example 1:

Under the terms of a minor league baseball player’s contract, he is determined eligible under Section 1252 during the off-season. However, because he played in the past season, is assured of playing in the next season, and substantially all of his base period services were as a sports participant, benefits are not payable under Section 1253.4.

Example 2:

Another claimant has a contract that carries her through the off-season, based on the terms of her contact she is determined ineligible under Section 1252. However, the claimant has decided to leave sports and, as a result, will not be playing in the next season, she would be eligible under Section 1253.4.

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Benefit Determination Guide