Unemployment benefits are provided by each state through employer tax funding of the nation's Unemployment Insurance System.
Employees, including those working for the government, are generally entitled to file insurance claims for state unemployment benefits when they suffer a reduction in work hours or lose their jobs, such as through financial cutbacks, plant closings or mass layoffs.
Did you know? In addition to unemployment benefits eligibility, unemployed workers might also be eligible to purchase a temporary extension of health insurance benefits at group rates for themselves and their dependants, under the Consolidated Omnibus Budget Reconciliation Act (COBRA).
Service members recently discharged honorably from active military duty are also generally entitled to file insurance claims for state unemployment benefits.
Unemployment benefits vary by state, but generally include weekly subsistence compensation, job-training opportunities, and job-searching and other re-employment assistance for those who qualify. (A few states provide self-employment assistance too.) Eligibility requirements also vary by state; but, generally, unemployed workers must meet the following requirements to qualify.
- Job loss typically can't be the fault of unemployed workers. For example, employees who were fired for misconduct, those who voluntarily resigned for other than good cause and those who resigned in lieu of discharge might not be eligible for unemployment benefits, while those who were laid off typically are eligible. Regardless, fired or resigned employees have little to lose by filing claims for unemployment benefits, because state unemployment offices consider each case individually. It's not unusual for such employees to win benefits on appeal, if serious gross misconduct was not involved.
- Must have been gainfully employed for a required period of time, called the "base period". Most states consider the base period to be four calendar quarters out of the past five, prior to filing a claim for unemployment benefits.
- Must have earned no less than a minimum amount during the base period. It varies by state, but is typically only a relatively small amount. How it's calculated also varies.
- Must be ready, willing and able to work. For example, unemployed workers who go back to school full time might lose their eligibility for unemployment benefits. The same goes for those who become disabled while collecting unemployment benefits; but, some might become eligible for state disability insurance programs.
Total wages earned during a worker's base period determine the amount and number of weekly unemployment compensation payments. The maximum number of weekly payments is typically 26 within an unemployed worker's "benefit year".* A benefit year is 52 weeks, and its start and end dates are based on the date that a worker filed an initial claim for unemployment benefits.
In other words, an unemployed worker typically has a year to collect the maximum weeks of unemployment benefits. Subsequently, unemployed workers usually may turn their benefits "off and on" within their benefit years, such as when working temporary jobs between collecting benefits.
Unemployment compensation minimum and maximum weekly payments vary by state; but, relatively speaking, even the maximum amount isn't much in any state. (Worse, compensation might be reduced by Federal income tax.) For example, at this writing, the maximum unemployment compensation in New York and California is $405 and $450 per week for 26 weeks, respectively. New York and California are typically among the highest-paying states. Unemployed workers in several other states receive considerably less.
A few states, such as Arkansas, Connecticut, Illinois, Iowa, Maine and Massachusetts, pay cash allowances for qualified dependants in addition to base unemployment compensation. The definition of a "qualified dependant" varies by state.
Did you know? Under extended benefits programs, states may increase the number of weekly unemployment compensation payments to eligible individuals. Disaster Unemployment Assistance (DUA) provides unemployment benefits to eligible individuals who've become unemployed or lost income as a direct result of a major disaster. Unlike for standard or extended benefits, self-employed individuals might be eligible for DUA.
Contact the unemployment office in your work state or browse its Web site to learn more about unemployment benefits, such as how unemployment compensation is calculated based on wages, the maximum weekly amount available, and how to file a claim. Don't be embarrassed to claim your stake of unemployment benefits. It's a common practice and among your employee rights.
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