There is a financial safety net (albeit limited) for workers who lose their jobs through no fault of their own, such as a layoff or company closure.
In almost every state, employers pay into their state unemployment insurance (UI) fund through a payroll tax, with occasional help from the federal coffers. When workers lose their jobs, they may apply for weekly unemployment benefits representing a percentage of their former earnings. Recipients must document their job search efforts in the event of an audit. Unemployment typically lasts for six months.
Unemployment Insurance at a Glance
The first thing unemployed workers should understand is that unemployment benefits are not available to those who voluntarily leave their job or are terminated for cause. UI administrators investigate and verify the nature of the job separation with the employer after a claimant files for benefits. The employer can challenge a former employee's claim. There is a system in place to resolve disputes over UI claims, which includes hearings and an appeals process.
You must have enough tenure as an employee to be eligible for unemployment benefits. Your employer will have paid into the UI program. The weekly amount you can receive is determined by the wages of your former job, although during the COVID-19 lockdown of 2020-2021, the weekly unemployment amount received by workers was increased across the nation.
Usually, there is a cap on the maximum amount of benefit you can receive. That amount is based on state law. In some states, it is as low as $300 a week, in others $600. Massachusetts allows up to $974.
Benefits usually end after 26 weeks, but they may be extended in times of financial distress. For example, workers affected by the "Great Recession" following the financial crisis of 2008 had their benefits extended for up to 99 weeks, which was unprecedented.
Benefits also end once the worker finds regular employment.
Unemployment Benefits After Termination
Individuals who are laid off, who are terminated to reduce payroll even if it's not an official layoff, and those who quit after a significant decrease in hours and/or benefits, are generally eligible for unemployment benefits.
Those who were fired for cause, such as misconduct or poor performance, are not eligible for UI benefits, but there are a few exceptions. An employee who was fired for a minor infraction, or for unintentional misconduct may be allowed to receive unemployment. And an employee can receive unemployment if their employer violated that law with a discriminatory or retaliatory firing.
Collecting UI Benefits After Quitting a Job
An employee who quits may still collect UI benefits if he or she is able to prove that a reasonable person would not have stayed on the job. For instance, an employee who is sexually harassed may quit but still should be eligible for UI benefits. Other instances where an employee who has voluntary left a job may still be eligible for benefits include:
- Discrimination
- Substantial reduction in hours or pay
- Threats of termination vs. voluntary resignation
- Unsafe or hazardous working conditions
- Relocation of a worksite that is substantially further away
- Time off needed to care for a family member
- Forced relocation in retaliation for a whistleblower action
Quitting because you don't like the job or because it doesn't offer
advancement opportunities are not considered grounds for UI eligibility.
How to File a Claim for Unemployment Benefits
The UI claim filing process may vary somewhat from state to state, though it is substantially similar. Most states allow a person to apply in-person, by phone, using the mail, or online. Applicants will supply their name, address, Social Security number, employment history, and other pertinent information.
The procedure for claims generally follows this sequence:
- The former work files a claim
- The state unemployment agency sends a confirmation letter to the employer and allows the employer an opportunity to dispute the claim
- The former employee then has an opportunity to respond
- State employment agency determines whether the employee is eligible. Usually, the employee is eligible and begins to receive benefits.
- If the employer disputes the claim, the employee and employer submit forms and documents in support of their position
- A UI hearing is conducted by a referee, with the option to call witnesses
- If one or both parties disagree with the referee's decision, it can be appealed to an administrative agency
- If one or both parties still disagree with the decision, it can be appealed to the State Superior Court
FindLaw's Unemployment Benefits section includes in-depth information about UI, including how to apply for benefits and other practical tips.
