Unemployment Insurance Laws

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 What Is Unemployment Insurance?

Unemployment insurance, also known as unemployment benefits or unemployment compensation, is a form of temporary income that eligible persons who are unemployed can collect from various government agencies in their respective state.

In general, unemployment insurance programs are typically funded by state payroll taxes. A portion of the taxes are set aside for the specific purpose of distributing unemployment benefits to state residents who qualify for them.

Despite the fact that unemployment insurance benefits primarily stem from state payroll taxes, such benefits are actually the result of federal regulations that are enforced by the U.S. Department of Labor (“DOL”). Specifically, the federal Social Security Act of 1935 established the concept of an unemployment insurance program, and the Federal Unemployment Tax Act (“FUTA”) now governs and administers funds to support state unemployment programs.

For instance, FUTA requires each state to establish an unemployment insurance plan that is compliant with both relevant federal and state unemployment laws. While states are permitted to adjust rates and modify some eligibility factors, the majority of state unemployment insurance programs must correspond with the guidelines set by federal law. It should be noted that unemployment policies created by a particular state may vary by jurisdiction.

For example, an individual who qualifies for unemployment insurance in the state of New York may receive approximately $504 per week, whereas a person who is eligible for unemployment insurance in the state of Massachusetts can collect up to $742 per week. Incidentally, Massachusetts happens to have the highest rate of unemployment insurance in the country.

Another important feature to keep in mind about unemployment insurance is that such benefits may only be distributed to persons under certain circumstances. For instance, an individual will not be eligible to collect unemployment benefits if any of the following factors apply:

  • If the individual was fired for just cause;
  • If the individual voluntarily left or quit their job; and/or
  • If the individual is or was self-employed (note that this rule has been temporarily suspended as of the passing of the 2020 CARES Act).

Accordingly, unemployment insurance is only available to persons who meet the conditions or requirements of their state’s program and have lost their job due to reasons that are beyond their control.

An example of someone who may be able to collect unemployment insurance would be an individual who was forced to leave their job due to permanent illness or injury, assuming that all other requirements are met and that their application is approved by their state agency.

In addition, many people may also qualify for stimulus checks based on their income level, latest tax return statement, and/or the number of dependents in their household. The federal government has periodically been issuing stimulus checks to citizens since the pandemic began. The most recent installment was distributed in May 2021.

Even people who have a job may be eligible to receive stimulus checks. Thus, if you believe you are owed a stimulus check and have not yet received it, you should visit the website for the Internal Revenue Service (“IRS”) and use their tracking tool.

Finally, to learn more about the unemployment insurance program in your state and/or to find out whether you qualify for unemployment insurance benefits, you can visit the website for your state’s unemployment insurance program or contact a local employment attorney for further guidance.

Who Is Eligible for Unemployment Insurance?

As previously mentioned, each state may adopt their own separate policies as well as create additional guidelines for determining whether an individual is eligible to collect unemployment insurance or not. However, there are some basic elements that tend to appear under most state unemployment insurance programs, which generally include the following:

  • A worker must have been employed by a business that pays for unemployment insurance.
  • A worker must have earned a certain amount of income or worked for a specific period of time (note that this criteria will vary widely by state).
  • A worker must not have been terminated for just cause, or alternatively, be the reason that they are no longer employed (e.g., they quit).
  • Originally, a worker would not be eligible to collect or even apply for unemployment insurance if they were an independent contractor or self-employed. However, since the passing of the CARES Act in 2020, this requirement has been temporarily suspended.
  • A worker must report any income that they earn while receiving unemployment benefits.
  • Workers who are granted unemployment insurance must also fill out and submit a weekly worksheet that proves they are actively applying for jobs. In addition, if they receive a job offer, a worker must accept the position.

Aside from the changes mentioned in the above list, the CARES Act of 2020 also expanded the criteria for unemployment insurance. Thus, many workers who were not previously eligible for unemployment insurance, may now be able to apply under the new rules.

Some modifications that the CARES Act made to the criteria for unemployment insurance and under which may affect the eligibility status of a worker may include:

  • A worker can now apply and collect unemployment insurance if an employer reduced the amount of hours that they work due to coronavirus guidelines.
  • Workers who were permanently or temporarily laid off because of the pandemic can also now collect unemployment insurance benefits.
  • A worker who is self-employed and lost income due to the pandemic and related measures may be eligible to receive unemployment benefits as well.
  • A worker who is unable to work due to risk of exposure to the coronavirus and/or because they are caring for a family member due to the coronavirus may also be able to collect such benefits.
  • Workers who were quarantined and unable to work because of the coronavirus are now eligible to apply and collect unemployment insurance too.

Finally, the American Rescue Plan of 2021 made further changes to unemployment insurance by extending the number of weeks that a person can collect unemployment benefits for under their current plan. For instance, the American Rescue Plan of 2021 tacks on extra weeks for unemployment benefit payments if:

  • An individual is already receiving unemployment insurance. If so, then their benefits will be extended for another twenty-five weeks up until September 6, 2021.
  • Those who have been collecting unemployment insurance benefits will also continue to receive the weekly supplemental benefit of $300 in addition to their regular benefits through September 6, 2021.

What Are the Steps to File for Unemployment Insurance?

The overall process and individual steps for filing a claim for unemployment insurance will mostly depend on the policies of a particular state. Each state must also take into account its different tax laws and various tax rates when implementing their own state’s unemployment insurance program. Thus, the steps to file for unemployment insurance can vary widely from state to state.

In addition to standard state laws, tax rates, and unemployment insurance policies, the federal government has also been forced to expand the criteria and requirements of all unemployment insurance programs due to the pandemic.

As discussed above, the federal government has created new guidelines by passing the CARES Act of 2020 and the American Rescue Plan of 2021. Accordingly, there are several new and significant requirements that are pandemic-related and may be subject to change at the end of this year. Individual states have also had to expand their criteria for eligibility due to these laws as well.

Generally speaking, an individual must at least satisfy the two main requirements to even be eligible to file a claim for unemployment insurance. These include:

  • That the individual must meet their state criteria for either the amount of time worked or wages earned within a specified period; and
  • That the individual is unemployed through no fault of their own (e.g., they developed a serious illness or were laid off because their employer had no work to give them).

Once an individual determines that they meet both factors in the above list, they should immediately visit the website for unemployment insurance claims in their state and search for information about any additional eligibility or filing requirements.

One other important factor that often shows up in states’ unemployment insurance policies is that the individual must be able, available, and actively looking for work while collecting benefits. Of course, depending on a state’s coronavirus policies some of these requirements may not currently be in effect.

After reviewing and determining that they meet all of their state’s eligibility requirements, the individual will need to complete and file an application for unemployment insurance. Such forms can typically be downloaded from the same state website the individual used prior to access the eligibility requirements. Some information that an individual may be expected to provide includes:

  • Information about their last employer and/or past job history;
  • The reason why they are applying for unemployment insurance;
  • The reason why they currently do not or cannot work;
  • Their contact information (e.g., address, phone number, full name, etc.); and
  • Various other important items, such as their Social Security number and potentially their bank account number if they wish to receive direct deposit.

After the application for unemployment insurance is complete, the individual can submit it through their state’s online portal and/or through whichever other methods their state has chosen as a way to accept applications for unemployment insurance.

Defending Against Unemployment Claims

Employers may be able to prevent former employees from obtaining unemployment insurance. An employer may be able to prohibit employees from collecting unemployment compensation by submitting a claim that says an employee is ineligible due to specific reasons, such as termination due to poor work performance.

Some defenses that may be available to an employer and could possibly lead to a successful outcome include the following:

  • If the employee voluntarily left the company without good cause (e.g., they quit because they wanted to look for a new job);
  • The employee was fired for just cause;
  • The employee violated a law or company policy, which then led to their termination (e.g., did drugs while on the job or intentionally harmed another co-worker); and/or
  • The employee is constantly absent or late for no reason and did not have permission from their employer to come in late or miss work.

Basically, if the employer can prove that the employee was fully responsible for the reason that they lost their job, then they may use those reasons as a defendant against a claim for unemployment. If the employer prevails, then this will prevent the worker from collecting unemployment insurance.

What Can I Do If I Am Found Ineligible for Unemployment Insurance?

If an individual is deemed ineligible for unemployment insurance, the individual will have a certain number of days to file an appeal. Each state will provide instructions on how to file an appeal and how quickly an appeal must be made after receiving an initial denial. If their application is denied on appeal as well, then the individual may be able to attend an administrative hearing before their state board to argue their case.

An individual who is denied unemployment insurance should contact a local employment lawyer for further assistance with their unemployment insurance issue. Lawyers who are experienced in handling these types of legal issues will be able to explain why a claim was denied, can help the individual file a claim for an appeal, and can recommend other options.

In addition, a lawyer can also provide representation in front of a state board or in court if necessary.

How Has the COVID-19 Pandemic Affected the Uninsurance Process

The unemployment process in the United States has been greatly affected by the COVID-19 Pandemic. Virtually, every industry and state in the nation has been impacted by the pandemic, which has caused the rate of unemployment insurance applications to spike to an unprecedented level.

This has not only affected the economy as a whole, but has also prompted the federal government to issue stimulus checks to make up for a portion of lost wages.

While the pandemic has enabled persons who are not ordinarily eligible for unemployment insurance to apply, this has led to massive delays in processing applications as well as distributing benefits. The pandemic and delays in processing have also forced states to issue temporary regulations, such as moratoriums on rent and interest on student loans.

Additionally, individuals will need to remain vigilant about updates to the unemployment process as deadlines are either extended or removed as the country continues to progress towards full recovery.

Do I Need a Lawyer Specializing in Unemployment Insurance?

While you do not necessarily need to hire a lawyer to file a claim for unemployment insurance, the laws concerning unemployment insurance benefits are continuously being amended due to the pandemic. Therefore, it may be in your best interest to consult with a local wrongful termination lawyer to make sure that you are in compliance with the most current set of federal and state unemployment regulations.

An experienced employment lawyer will already be familiar with the employment process in your state and will be aware of any significant changes in the law. Your lawyer will be able to assist you in filling out the necessary paperwork and can guide you through the entire filing process. Your lawyer will also be able to answer any questions you may have about your claim and/or the unemployment insurance benefits you collect.

If you need to extend your unemployment benefits or if your claim for unemployment insurance is denied, your lawyer will be able to assist you with these procedures as well. In addition, your lawyer will also be able to provide legal representation if you need to attend an administrative hearing or appear in court.


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