Unemployment Insurance Program: All the details

An unemployment insurance program provides unemployment benefits to eligible workers who become unemployed through no fault of theirs and meet other eligibility conditions.

Unemployment insurance is a joint federal government program that provides cash benefits to eligible workers. Each state maintains a separate unemployment insurance program, but all states follow the same guidelines established by federal law.

Major Points to Note

• Unemployment insurance money usually lasts 26 weeks.
• Unemployment insurance is also called unemployment compensation.
• If you quit your job, you are not entitled to unemployment insurance.
• Freelancers are not eligible for unemployment insurance funds.
• United States Department of Labor is accountable for the unemployment insurance program.

What is unemployment insurance?

Unemployment insurance, sometimes called unemployment benefits, is a type of coverage offered by the state that pays when you lose your job and meets certain eligibility conditions. You will not be qualified to receive unemployment benefits if you quit your job, work alone, or are laid off for a good cause. Benefits are mainly paid by state governments and financed by specific taxes on wages collected for this purpose.

How does unemployment insurance work?

The initiative is a joint program between the state and the federal government. Unemployment insurance provides cash benefits to the unemployed who are actively looking for work. The allowance for eligible unemployed persons is paid by the Federal Unemployment Tax Act (FUTA), in collaboration with the state employment agencies.

Each state in the United States has an unemployment insurance plan, but all states must follow specific guidelines outlined in federal law. The federal law makes unemployment benefits relatively ubiquitous across national borders—United States Department of Labor. The United States oversees the program and ensures compliance in all states.

Workers who meet specific eligibility requirements can receive up to 26 weeks of cash benefits per year. Weekly cash compensation was created to replace, on average, half of the employee's regular salary—States finance unemployment insurance using taxes levied by employers. Most employers will pay FUTA, federal, and state unemployment taxes. Companies with 501 (c) 3 status does not pay FUTA tax. Three states also require minimum employee contributions to the state unemployment fund.

Reproducible earnings include self-employment or employment for which unemployment insurance beneficiaries were paid in cash.

Unemployed workers who cannot find employment after 26 weeks may be eligible for an extended benefits program, if available. Extended benefits provide the unemployed with an additional 13-20 weeks of unemployment benefits. The availability of outspread benefits will depend on the general unemployment situation of a state.

Eligibility and Claim Requirements

There are two main requirements that an unemployed person must meet to receive unemployment insurance benefits. An unemployed person must comply with the legal limits set for the wages earned or the time worked in a given necessary period. The state must also establish that the skilled person is unemployed through no fault of theirs. A person can claim unemployment benefits when they meet these two conditions.

People apply in the state in which they worked. A participant can file a complaint by telephone or on the website of the unemployment insurance agency. After the first request, it will take two to three weeks to process and approve a complaint.

After approval of a complaint, the participant must submit weekly or bi-monthly reports demonstrating or confirming their employment status. Reports must be filed to remain eligible for payment of benefits.

An unemployed person cannot refuse to work for a week and, with a weekly or bi-weekly allowance, and must declare any income from consultancy or freelancing.

How do you know if you're Eligible? 

Each state establishes its guidelines for eligibility for unemployment insurance benefits, but generally qualifies if:

• You are unemployed for reasons that you cannot control. In several states, this means that you must be separated from your last job due to the lack of available work.
• Meets work and salary requirements. You must meet your state's requirement(s) for time worked or wages earned in a defined period called "base period." In several states, this is usually the first four of the last five full quarters before the date of your request.
• Meet additional state requirements. 

How do I Register?

To receive unemployment insurance benefits, you must register with the unemployment insurance program of the state where you worked. Depending on the state, complaints can be filed in person, by phone, or online.

• You should contact your state's unemployment insurance program as soon as possible after you become unemployed.
• In general, you must register your application in the state in which you worked. If you have worked in a state other than the one in which you currently live or if you have worked in more than one state, the unemployment insurance agency in which you currently live can provide you with information on how to file your request in other states.
• When filing a complaint, you will be required to provide certain information, such as addresses and dates of previous employment. Ensure that your application does not delay in providing complete and accurate information.
• It usually takes two to three weeks after your request to receive the first benefit check.

Unemployment Insurance Flexibility Guidelines During the COVID-19 Epidemic

Federal law gives states wide latitude to change their laws to provide unemployment insurance benefits in different COVID-19 scenarios. For example, federal law gives states the ability to pay benefits when:

• An employer temporarily interrupts operations due to COVID-19, preventing employees from going to work;
• A person is quarantined while waiting to return to work after the end of the quarantine. 
• A person leaves work because of the risk of exposure or infection or to take care of a family member.

Also, federal law does not require an employee to resign from receiving benefits due to the impact of COVID-19.

NOTE: Check with your state's unemployment insurance program for your state's rules.