Unemployment benefits, which are also known as unemployment insurance (UI), were implemented to provide financial support to employees who have been terminated or laid off. The amount of benefits an individual will receive is a percentage of their wages or salary they earned while employed.
Generally, individuals who are unemployed through no fault of their own are eligible to receive unemployment benefits. This includes:
Certain employees who were terminated may still be eligible to receive unemployment benefits. For example, if the employee was simply not a good fit for the position or was fired for a small issue, such as occasional tardiness, they may still be eligible to receive benefits.
An employee who is laid off may also be eligible. This applies if the employee was terminated or temporarily laid off due to reductions in the workforce or company cutbacks.
An employee who made an effort to keep their employment but quit for good cause may be eligible to receive unemployment benefits. Good cause may include issues such as unsafe work conditions, quitting based on the advice of a doctor, or sexual harassment.
When an individual files an application for unemployment benefits, their state’s unemployment agency will review their application and interview the individual as well as their former employer. Following the interviews, the state agency will determine whether or not the individual qualifies for benefits. Under normal circumstances, not all employees would qualify, including independent contractors and individuals who were voluntarily terminated.
In most states, an employee is eligible to receive unemployment benefits if their income met or exceeded a certain minimum threshold for wages or hours and they were laid off, quit for good cause, or were terminated for a reason other than misconduct. The majority of states require the individual to be actively seeking other suitable employment.
Each state has individual rules for determining eligibility to receive benefits, calculating the duration and amount the individual receives, and for appeals if the benefits application is denied. Unemployment benefits are typically paid each week for a set period of time, usually up to 26 weeks.
In order to be eligible to receive unemployment benefits, and individual must satisfy requirements, including being:
- Able to work, including being physically and mentally capable of working;
- Available to work; and
- Actively seeking work.
How Much Unemployment Can I Collect?
Every state uses a different formula to calculate payments but all states consider prior earnings in some way. Some states use the individual’s prior annual earnings while other states use the individual’s earnings during the highest paid quarter or the two quarters in the base period.
Additionally, all states have a maximum limit on the weekly benefit amount an individual can receive. In some states, an individual with dependents may receive additional amounts. However, these amounts tend to be small, typically $25 or less per dependent.
It is also important to remember that unemployment benefits are taxed as income. An individual can choose to have up to 10% of their benefit amount withheld for tax purposes.
If an individual earns other income while receiving unemployment benefits, their benefit amount may be reduced. Additionally, if they obtain employment, they will no longer be eligible for benefits.
If an individual obtains temporary work while otherwise unemployed, they are required to report those earnings to the state unemployment agency. The agency will determine whether or not their benefits should be reduced.
If an individual is found eligible for unemployment benefits, they will receive a notice from the state unemployment insurance department. This notice will indicate how much money they will receive each week.
Unemployment benefits have undergone some temporary changes due to the COVID-19 pandemic. Congress passed a COVID-19 relief package in December 2020 that provided an extra $300 per week in unemployment benefits for up to 11 weeks, ending in March 2021.
In addition, the Coronavirus Aid, Relief, and Economic Security (CARES) Act provided additional unemployment benefits. The CARES Act created the Pandemic Emergency Unemployment Compensation (PEUC), which extended unemployment benefits by 13 weeks, up to 39 weeks.
The CARES Act also created Pandemic Unemployment Assistance (PUA) which allows individuals who would not typically qualify for benefits to obtain them. This includes self-employment individuals, gig workers, and freelancers. Individuals who are unable to work due to having COVID-19, being under quarantine, or caring for children whose child care facility or school is closed due to COVID-19 are eligible for employment under PUA.
It is important to note that both of these programs originally closed to new claims on March 14, 2021 and expired for existing claims on April 5, 2021. However, they have been extended through September 6, 2021.
How Long Am I Entitled to Unemployment Benefits?
In normal situations, the majority of states provide unemployment benefits for up to 26 weeks. A few states offer benefits for a shorter period of time. It is important to consult with an attorney to determine the exact rules in an individual’s state.
However, as noted above, COVID-19 has caused changes to these limitations. Unemployment benefits have now been extended 13 additional weeks, up to 39 weeks total.
What if My Unemployment is Connected to COVID-19 Matters?
As noted above, the COVID-19 pandemic has caused changes to unemployment issues. Congress passed the Families First Coronavirus Response Act (FFCRA) which gives employees the right to receive paid leave and paid sick time for issues related to the virus.
The Act provides employees who are eligible for coverage with the following:
- Two weeks, or up to 80 hours, of paid sick time at the employee’s regular pay rate if they are unable to work due to:
- quarantine that is a result of a federal, state, or local government order;
- the advice of a healthcare provider; or
- having COVID-19 symptoms and seeking a medical diagnosis;
- Two weeks, or up to 80 hours, of paid sick time at two-thirds the employee’s regular pay rate if they are unable to work due:
- a bona fide need to care for another individual who is subject to quarantine as a result of a federal, state, or local government order;
- due to the advice of a healthcare provider; or
- in order to care for a child who is under 18 years of age whose child care provider or school is closed or unavailable for reasons related to COVID-19; and
- Up to an additional 10 weeks of paid family leave at two-thirds the employee’s regular pay rate if the employee has been employed for at least 30 days and cannot work due to:
- a bona fide need for leave to care for a child whose child care provider or school is closed or unavailable due to COVID-19.
If an employee is terminated after notifying their employer that they are taking sick time or leave under this act, they may be eligible for unemployment benefits. They may also seek the advice of an attorney regarding a wrongful termination lawsuit.
I’m Having Trouble Getting Through with the Unemployment Office. What Should I Do?
The majority of state unemployment offices are overwhelmed with applications and individuals attempting to contact them at this time. In many cases, an application can be filed online at the department’s website.
If an individual is having trouble contacting their unemployment office, they may have to visit the physical location of the office to determine the issue. It may also be helpful to call during hours where the office is less busy, which is typically early in the morning.
Can I Extend My Unemployment Eligibility Due to COVID-19?
Yes, as noted above, the CARES Act provided additional unemployment benefits. This includes extending the typical 26 week limit by an additional 13 weeks, up to 39 weeks of benefits.
Do I Need to Hire an Unemployment Lawyer?
Yes, it is essential to have the assistance of an experienced worker’s compensation lawyer to assist you with any unemployment benefits issue you may have. Having an attorney helping with your application can ensure you meet all deadlines and your application is completely and accurately completed, which will ensure it is processed as quickly as possible. In addition, if your application is denied, your attorney can assist you with an appeal of that decision.