Understanding how Unemployment Benefits Work

In this era of economic uncertainty, job security isn’t something that can be taken for granted. At any given moment, even the most dependable, skilled employee can be sent packing. Since an income is virtually essential for one’s survival, the loss of a job can be devastating. Fortunately, in the United States, a cushion of sorts was created for people that suddenly find themselves in this predicament. Unemployment benefits exist to provide workers that lose their jobs monetary compensation for either a set amount of time or until a new job is found. Thus, this can be thought of as a kind of insurance, and oftentimes, this is even referred to as unemployment insurance.

However, before any of you readers get any ideas about getting intentionally fired or simply quitting a job because you dislike your duties, it needs to be pointed out that unemployment benefits don’t work that way. If they did, nearly everyone would be doing one or the other and society as it’s known would fall apart. Instead, unemployment insurance is intended to provide temporary financial relief for those seeking gainful employment because they lost their job through no fault of their own, such as someone who is laid off due to downsizing.

Individual state unemployment benefits and/or insurance programs follow a set of guidelines established by Federal law. As such, and in order to take advantage of such benefits, an out-of-work individual must meet specific eligibility requirements. To begin with, a person must be employed in the same position for a specified period of time to even be considered. Generally, this is at least two quarters of a fiscal year to year-and-a-half. As noted above, the individual also must have lost his or her job without fault. Obviously, this prevents someone from deliberately screwing up on the job just so he or she can collect money for sitting at home. However, and interestingly, one can still be fired from a position in certain instances and collect these benefits. What follows are examples of what constitutes eligibility and what doesn’t, respectively:

Suppose you take on a new type of work that you are unfamiliar with. Jobs can be scarce, so this isn’t uncommon. In this setting, there will be times when it is revealed that you simply cannot perform the expected duties to an employer’s acceptable standards. Perhaps you can’t keep up with a fast-paced job or discover that you simply don’t have the needed talent to produce quality work. Put in simplest terms, you are not cut out for a specific line of work, so the company decides to let you go and seek a more suitable replacement. In this case, you would be eligible for unemployment benefits, but there is a big catch. Since you have to be employed for at least a couple of fiscal quarters, those who discover they are not made for a particular line of work rarely collect such compensation because most companies won’t wait that long to get rid of a subpar employee. In fact, many have a 30-90-day probationary period for this very reason. This reduces their tax liability.

Here’s what most decidedly won’t work: You begin working at a particular place and decide that you don’t like it. There could be many reasons for this. Maybe your supervisor is a jerk. Perhaps the job duties are boring or monotonous or the company has policies that you don’t enjoy complying with. In any case, you start to perform poorly or violate company policies and get warned a few times, and finally, upon crossing this figurative line one too many times, your employment is terminated. As far as collecting unemployment, guess what? You’re out of luck, regardless of how long you’ve worked there!

Other disqualifiers for unemployment benefits include the following:

As mentioned above, simply quitting a job without good cause is not grounds for eligibility. You may hate your job so much that you have to leave on your own accord, but that’s not the employer’s or the state’s problem. Those that resign due to illness are not eligible for benefits, either. Disability insurance takes over in these situations. If you leave a job to get married or simply relocate, you’re on your own as well. Those who are self-employed and run into tough times are also ineligible. Similarly, those being paid worker’s compensation due to an injury or medical restriction are not eligible. If you’re involved in a labor dispute, such benefits are likewise not offered, although you may be able to collect a nominal amount of strike pay from your union. Finally, and even if you don’t meet any of the criteria listed above but fail to show that you are looking for new employment, you still won’t receive benefits.

Eligible Collection

In most states, regular benefits will be paid up to a maximum period of 26 weeks. Depending on location, this compensation will generally amount to half or three quarters of your former earnings, and they will be subjected to Federal and State income tax just like your regular paycheck was. In times of economic turndown when unemployment rates are especially high, these benefits can be extended past the 26-week period. Once a person loses his or her job, it is in their best interests to file for unemployment as soon as possible, because that first check may take a few weeks to arrive. In some cases, you may be able to quit your job and still collect unemployment benefits if you can demonstrate good cause. Examples of this would be a sudden change in workshifts, being told that the company is relocating to a faraway place, or even verbal or physical harrassment.

You must register with your state’s Job Service and actively be seeking employment in order to receive benefits. If the unemployment office decides you are ineligible, you are entitled to a hearing where you can plead your case. You can also file an appeal. Documentation is of utmost importance if you should find yourself in this situation. When you suddenly become unemployed and lose that income you depend on, your local state Job Service is there to help you with many free services ranging from counseling, resume and cover-letter-writing assistance, re-training, and of course, job listings.

It’s never fun to lose a job, but unemployment benefits can go a long way in helping those who have get back on their feet.