Unemployment compensation is an insurance program, run jointly by the federal and state governments. Employers pay taxes into a fund. When employees lose their jobs through no fault of their own, they can collect from this fund, as long as they meet their state’s eligibility requirements.
Laid-Off Employees Are Eligible for Benefits
Each state has its own eligibility rules for unemployment. In every state, an employee is eligible for benefits only if the employee is out of work without fault. If, for example, an employee is fired for stealing from the employer or other serious misconduct, the employee almost certainly won’t be eligible for benefits. Similarly, if the employee quits voluntarily, without a good reason, the employee probably won’t qualify for benefits.
However, employees who lose their jobs in a layoff, reduction in force, downsizing, or other job action based on economic factors, are eligible for unemployment. For example, if you are out of work because your plant closed, your employer went belly up, your job was outsourced, or your company simply had to cut payroll to save money, you will be eligible for unemployment.
Other Eligibility Requirements
Even if you lost your job for a reason that entitled you to unemployment, you will get benefits only if you meet your state’s other eligibility requirements. Most states have an earnings requirement. You must have earned at least the minimum amount set by state law during the "base period": a one-year period consisting of the earliest four of the last five complete calendar quarters of the year before you apply for benefits. Some states also have a work requirement, entitling employees to benefits only if they worked for the employer for a minimum period of time before losing their jobs.
Unemployment compensation is intended to be a temporary assist to employees who are between jobs. To receive benefits and continue receiving them, you will have to show that you are able to work, available to work, and actively seeking a new job. Some states require you to complete a form, submit a list of employers where you applied for a job, or participate in an interview to prove that you are really looking for work.
Applying for Benefits
Most states have a form you can complete online to start your benefits application. (In some states, you may also apply in person or by phone.) The agency will likely contact you – and your former employer – for a telephone interview. Within a couple of weeks, you should know whether your application has been approved or denied.
To find out more about your state's laws on eligibility for unemployment benefits, and to learn how to apply for benefits, contact your state unemployment insurance agency. You can find links and contact information for every state's unemployment agency at www.servicelocator.org/OWSLinks.asp.