Unemployment After a Layoff

Employees who are laid off for economic reasons are entitled to unemployment benefits, if they meet their states' requirements.

Unemployment compensation is an insurance program, administered by each state, to provide partial wage replacements to employees who have been fired through no fault of their own. Unemployment insurance is funded by payroll taxes collected from employers. While unemployment benefits follow a similar structure across all states, each state has its own eligibility requirements, benefit amounts, and other rules. Employees who are laid off and make certain minimum earnings are typically entitled to unemployment benefits.

No Fault

In every state, an employee is eligible for benefits only if the employee is out of work without fault on his or her part. In general, employees who quit their jobs are not eligible for unemployment, unless they had good cause for quitting. Each state defines “good cause” differently, but this may include quitting because of dangerous working conditions, to relocate due to domestic violence, or to relocate due to a military spouse’s transfer. Employees who are fired are still eligible for benefits, as long as they were not fired for misconduct. Misconduct usually involves an intentional violation of company policy or disregard for the employer’s interests, such as stealing, having repeated unexcused absences after being warned, or arriving at work under the influence of drugs or alcohol.

Employees who lose their jobs in a layoff, reduction in force, downsizing, or other economic reasons will meet the no-fault requirement. 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 through no fault of your own, you must still meet your state’s other eligibility requirements. Most states require that an employee earn a certain amount in wages or work a certain number of hours for the employer in order to receive unemployment. Most states determine whether you meet the earnings or hours requirement by looking at your "base period": a one-year period consisting of the first four of the last five complete calendar quarters of the year. For more information on the base period, see our article, Eligibility Requirements for Unemployment Benefits.

Unemployment compensation is intended to provide temporary assistance to employees who are between jobs. To receive benefits, 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 perform a certain number of job searches per week, keep a log of the employers you’ve contacted, or even participate in an interview to prove that you’re really looking for work.

If you’re offered a suitable job, you must accept it, or your benefits will be discontinued. In general, whether a job is suitable depends on your previous position, earnings, location, and other factors. If the job is in your line of work, requires the same skill set, pays a similar salary, and is within a reasonable commuting distance, you may be required to accept the position. And, the longer you’re unemployed, the more willing you will have to be to accept work that requires different skills, pays less, or is further away.

Applying for Benefits

In most states, you can file a claim for unemployment benefits online. However, some states do require applicants to apply in person or by phone. Once you file your claim, your state’s unemployment agency will likely contact you for a telephone interview. The agency will also likely contact your former employer to verify the information you’ve provided. Within a couple of weeks, you should know whether your application has been approved or denied. The state unemployment agency will typically send you certain documents, indicating whether you meet the eligibility requirements and what your potential benefit amount will be.

Each state has its own method of calculating your weekly benefit amount, but it’s usually based on your average earnings during the one-year base period. In most states, there’s a cap on the weekly benefit amount that you can receive, and benefits are usually available for up to 26 weeks.

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.

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