Unemployment Insurance

Losing your job or having your hours cut at work can be a very stressful experience. Not only are the circumstances surrounding a job termination often demoralizing, but the prospect of spending weeks or even months without a regular paycheck is enough to put a significant strain on the finances of most households. Fortunately, the government provides help to eligible individuals who become unemployed or underemployed. These weekly benefits are equivalent to a portion of the worker’s previous earnings and are meant to provide a layer of financial security to workers and their households while they search for new full-time work. These benefits are not meant to replace the worker’s paycheck completely, so it is important that those receiving unemployment benefits to continue to actively look for full-time work while they are enrolled in the UI program. Read on to learn more about the benefits you can receive under unemployment insurance, as well as the program’s eligibility and application process.

What is unemployment insurance?

Although many people hold the misconception that unemployment benefits come from funds that have been taken out of their paychecks, unemployment insurance benefits are actually paid for through taxes paid by employers throughout the country. This means that workers themselves do not pay unemployment insurance funds. However, it also means that there are strict eligibility requirements as to what types of jobs make a worker eligible for unemployment benefits. This is because workers can only receive benefits if they have worked long enough and earned a certain amount in wages. Additionally, the program imposes strict eligibility guidelines in other areas that workers must follow if they wish to receive benefits.

Unemployment Insurance Eligibility

Unemployment insurance is not a benefit program like the Supplemental Nutrition Assistance Program (SNAP) or Temporary Assistance for Needy Families (TANF), as you do not have to be living in a low-income household to receive UI benefits. However, the program nevertheless imposes strict eligibility requirements that workers must meet before and after enrolling for benefits. The most important of these requirements states that workers may only receive unemployment benefits if they were terminated or given fewer hours through no fault of their own. This means that applicants to the unemployment program can receive benefits if they were terminated due to mass layoffs, lack of work, wrongful termination or for no stated reason at all. However, workers may not be eligible for benefits if they were fired due to any of the following reasons:

  • Failing to meet expectations
  • Negligence or carelessness on the job
  • Violating work rules or committing a crime
  • Failing a drug test

Other Unemployment Eligibility Requirements

In addition to the job loss requirements imposed under unemployment insurance, the program also has other wage and work time requirements. In order to receive benefits, applicants must have worked full time for a certain amount of time, and they must have earned a certain amount in wages during that time period. Although there are national unemployment insurance laws that govern how the program operates, each state has a broad degree of freedom in implementing the program. Therefore, the threshold for minimum earnings requirements and time worked vary depending on the state. Usually, however, applicants must have worked full time for at least one year and received a certain amount in wages during a “base period.”

The base period is a period of time that spans the final four of the last five calendar quarters in which the applicant worked. The wages earned during that quarter need to be above a certain threshold set by each state. However, if the worker did not earn enough money during this period to be eligible for unemployment insurance benefits, an alternate base period can be used to determine eligibility. The alternate base period is usually the four most recent quarters before the worker filed for benefits.

Unemployment Insurance Benefits

Apart from establishing eligibility for unemployment insurance, the base period also helps unemployment agencies calculate the amount of benefits the applicant may receive. Usually, benefits are calculated by taking the wages earned during the highest-earning quarter of your base period and dividing them by a certain number of weeks. However, not all states calculate benefits the same way. Therefore, it is important to understand how benefits are calculated in your state so that you can estimate how much you are able to receive. Keep in mind that every state has maximum weekly benefit amounts, and you cannot receive more money than your state’s maximum each week.

Weekly Certification Requirements

Once you are enrolled in your state’s unemployment insurance program, you will need to engage in certain weekly work search activities in order to maintain your eligibility. To continue receiving unemployment benefits, you must certify for benefits each week. This can usually be done either by phone or online. During the weekly certifications, you must attest that you are able to work and are actively looking for full-time work. You will need to report all your work search activities, providing information on where you have applied for work each week, how you have applied, how you followed up and more.

How to Apply for Unemployment Insurance

Since unemployment benefits are administered on a state level, the application process differs from state to state. Therefore, it is important that you understand your particular state’s unemployment application methods. Generally, states give applicants various options for applying for benefits. The most common ways to apply are by phone and online. Of these, online applications are usually the quickest and most convenient. In order to apply, you will need to have certain documentation on hand. When you apply, you must provide your Social Security Number (SSN), recent pay stubs or W-2 forms and more. You will also need to provide information about any and all employers you have worked for during the past year or 18 months, including their addresses, their contact information and your employment dates. Finally, you will need to answer questions about the circumstances surrounding your termination or loss of full-time work.