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You are Here: Home > Unemployment > Unemployment Insurance Benefits and Laws - 2


Unemployment Laws

Unemployment laws got their start under the Social Security Act of 1935. The Act established the Unemployment Insurance System in response to the Great Depression.

The Wagner-Peyser Act of 1933 established a nationwide system of public employment offices to administer unemployment laws and benefits. Such offices are commonly referred to as "unemployment offices".

The Workforce Investment Act of 1998 (WIA) amended the Wagner-Peyser Act and established One-Stop Career Centers throughout the states. One-Stops provide free employment assistance in partnership with state unemployment offices.

The U.S. Department of Labor oversees the Unemployment Insurance System at the Federal level. States are allowed to create their own unemployment laws, rules, regulations and programs that meet or exceed the same at the Federal level.

Consequently, unemployment laws vary by state, as do unemployment benefits. State unemployment laws and regulations are usually administered by so-called unemployment offices that are typically divisions of state labor departments or other employment-related agencies.

Under the Federal Unemployment Tax Act, most employers must pay Federal and state unemployment taxes. These taxes, often referred to as unemployment insurance payroll taxes, fund unemployment benefits programs.

Under the Extended Benefits Program authorized by the Federal-State Extended Unemployment Compensation Act, state unemployment laws are required to have provisions for temporarily extending standard weekly unemployment compensation payments to eligible individuals. This program, nicknamed FED-ED, is active only when triggered by periods of high unemployment.

Some states have their own programs per unemployment laws or related regulations, that are equivalent to FED-ED. For example, California calls its program CAL-ED. See Extended Unemployment Benefits for more information.

Trade Act Programs provide income support to unemployed workers who have exhausted standard unemployment benefits, if they lost their jobs because of increased foreign imports or shifts in production to other countries.

Unemployment laws generally grant employers the right to dispute unemployment benefit claims. State unemployment offices might initially deny benefits to employees based on employer disputes. But, on the flip side, unemployment laws also generally grant employees the right to appeal denials of benefits (such as when fired for gross misconduct).

Appeal procedures vary by state, as do the unemployment laws that grant the right to appeal. To appeal a decision, follow the instructions provided by your state unemployment office to the letter. Because you might have to ultimately appeal your case in an official hearing before an administrative law judge, be sure to first get your case in order, including supporting evidence.

If you're not comfortable organizing your case or representing yourself before an administrative law judge, hire an attorney who specializes in unemployment laws for the state in which you intend to appeal.

Employers are not allowed to retaliate against employees who appeal benefit denials or for otherwise exercising their employee rights under unemployment laws. Consequently, many state unemployment laws allow individuals to file lawsuits against their current or former employers, for violating their rights under unemployment laws. See an attorney about that.

But, whether an appeal or lawsuit, naturally, attorney's fees will have to be reimbursed or reasonable enough to warrant hiring one to win meager unemployment compensation, plus punitive damages if appropriate. Discuss that up front with the attorneys you're considering for hire.

Unemployment laws might allow state unemployment offices to delay or reduce unemployment benefits, if employers owe or paid certain wages to employees who've filed claims. The reasons for which employers owe or paid the money determine whether or not it constitutes wages.

For example, at this writing, California unemployment laws consider pay in lieu of notice and accrued vacation pay to be wages under certain circumstances, but never severance pay. Pay through the advanced notice period required by the Federal Worker Adjustment and Retraining Notification Act (WARN) or an equivalent state unemployment law might constitute wages in some states, but not in California at this writing.

Regardless of money due or paid by their employers, employees typically may still get the ball rolling by filing claims for unemployment benefits right after they lose their jobs or work hours, or receive official notice that either is soon forthcoming.

Independent contractors (ICs) are generally not eligible for standard state unemployment benefits. That's because such benefits are for employees. ICs are not employees under unemployment laws or related regulations, because they are effectively self-employed for tax reasons.

However, ICs might be retroactively eligible, if unemployment offices (or other government agencies) determine that employers have misclassified them as ICs, when they're actually employees. It happens a lot.

ICs might be eligible, if they worked on the side as employees during their base periods and lost those jobs through no fault of their own. ICs might also be eligible for the Disaster Unemployment Assistance Program mentioned on the previous page. Current income from IC employment will likely be among the determining factors in either of these cases.

If you have questions about unemployment laws or benefits, contact the nearest state unemployment office or browse its Web site. Alternately or additionally, consult an attorney who specializes in unemployment laws for the state in which you work.

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