According to the U.S. Department of Labor, “Unemployment insurance is a joint state-federal program that provides cash benefits to eligible workers. Each state administers a separate unemployment insurance program, but all states follow the same guidelines established by federal law.” 

 

Now, it’s important to understand and recognize that unemployment benefits are not welfare programs. It’s a joint federal-state insurance program funded through taxes paid by employers. 

 

The Basics

The basic program in most states provides up to 26 weeks of benefits to unemployed workers, replacing about half of their previous wages, on average.  Although states are subject to a few federal requirements, they are generally able to set their own eligibility criteria and benefit levels.

 

Who Is Eligible?

Program specifics are determined on a state-by-state basis, but given that it is overseen by the U.S. Department of Labor, most if not all states use the following guidelines to determine eligibility. 

 

You are unemployed through no fault of your own. In most states, this means you have to have separated from your last job due to a lack of available work.

 

You meet work and wage requirements. You must meet your state’s requirements for wages earned or time worked during an established period of time referred to as a “base period.” (In most states, this is usually the first four out of the last five completed calendar quarters before the time that your claim is filed.)

 

You meet any additional state requirements, which can be determined by clicking here. 

 

Who Pays For It?

In general, all employers have to pay unemployment taxes. Some exemptions exist, which are discussed later. Employers need to know about federal and state unemployment taxes.

The federal unemployment tax is mandated by the Federal Unemployment Tax Act (FUTA). FUTA tax pays for the federal government’s oversight of each state’s unemployment insurance program.

 

You must also pay for state unemployment insurance (SUI). State unemployment insurance pays out benefits to unemployed workers in your state. You also pay a tax for this, called SUTA tax or SUI tax.

 

Coronavirus Impact Programs

If you’ve lost your job as a direct result of the recent COVID-19 coronavirus pandemic, there may be additional resources available to you.

 

According to Forbes, “… in addition to the weekly unemployment benefits, you can receive $600 a week from the date you lose your job through July 31, 2020. The CARES Act also can extend your state’s unemployment benefits by another 13 weeks.”