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Eligibility for Unemployment Compensation Benefits

Unemployment compensation, also commonly referred to as unemployment insurance (UI), is a government sponsored and administered benefits program that provides financial support to qualified unemployed workers. The federal government and states manage the program together and fund it with taxes collected from employers. Every state has different rules and regulations, but the following information provides a general overview of unemployment compensation benefits.

Protected Employees

Every state's rules vary, but in general, qualified employees must meet the following conditions in order to receive unemployment compensation benefits in their state:

  • The individual is a U.S. citizen or can provide proof of the legal right to work in the United States;
  • The individual was employed for a certain period;
  • The individual earned a certain amount in wages before becoming unemployed;
  • The individual is available for work immediately; and
  • The individual is physically able to work.

Part-time workers and temporary workers may qualify if able to meet the conditions of their state.

When the Employee is Fired

Depending on the circumstances, a terminated employee may still qualify for unemployment compensation benefits. An employee termination for financial reasons, for unintentional actions, or because of a layoff, for example, may not exclude an employee from receiving benefits. On the other hand, if an employer fires an employee for misconduct that was deliberate and repeated, it will disqualify the employee in most states. Common types of misconduct include:

  • Frequent tardiness;
  • Unexcused absences;
  • Violation of the rules of the workplace;
  • Intoxication on the job;
  • Sleeping on the job;
  • Dishonesty;
  • Extreme insubordination;
  • Sexual harassment; and
  • Actions that cause substantial injury to the employer's business.

Misconduct does not include behavior that amounts only to poor performance like carelessness, lack of skill, or errors made in good faith.

When the Employee Quits

An employee that quits a job is typically ineligible for unemployment compensation unless it was for "good cause." Most states define good cause as a condition that would have resulted in harm or injury if the employee did not quit. Good cause usually includes the following:

  • The health or life of the employee was endangered;
  • The employee was subject to intolerable working conditions, such as sexual harassment or discrimination and the employer refused to remedy the problem;
  • The job was relocated to a location that substantially increased an employee's commute time or the job was relocated to another state;
  • The employee's spouse relocated to another state for a new job; and
  • The employee had a compelling personal reason, such as taking care of a sick spouse.

In most states, good cause for quitting a job excludes such reasons as career advancement or job dissatisfaction.

Filing a Unemployment Compensation Claim

To receive unemployment benefits, an unemployed worker must file a claim with the agency in their state that handles the requests. The following steps apply:

  • Filing the Claim: When filing a claim, it is necessary to provide documentation, such as recent pay stubs, a Social Security card, and proof of unemployment status. In general, a one-week waiting period applies before an unemployed worker will receive benefits. The former employer will receive a notice of the claim and may file a written objection.
  • Investigation of Eligibility: Benefit eligibility is determined by assessing the reason for the job loss. After making an initial determination of eligibility, the unemployment agency will send an inquiry to the former employer asking for verification of the reason for termination.
  • Appealing a Decision: A former employer or employee may appeal a state agency's decision. If denied benefits, in most states, an employee has one to four weeks to file an appeal. If an employer appeals a decision, the employee can still collect benefits until the issuance of a contrary decision. If the former employer prevails, the employee may have to repay the amount received in benefits.
  • Hearing: At the hearing, both parties may have an attorney and can present witnesses and relevant written records to the hearing officer.
  • Administrative Appeal: Either party can appeal the decision of the administrative agency. The records presented at the initial hearing are the basis for the review of the decision. In most cases, the administrative agency will enforce the decision of the hearing officer.
  • Judicial Appeal: Either party can appeal the decision of the administrative agency to the state court system. In all likelihood, however, the state court will confirm the decision unless it is unsupported by evidence or the law.

Unemployment Compensation Benefits

An employee with a successful claim is entitled to unemployment benefits. Every state has different calculation methods, but unemployment benefits are typically less than the compensation the employee received when employed. This is because the benefit amount is usually based on a percentage of the employee's earnings during a certain period. An eligible worker can receive benefits for 26 weeks. However, if eligible for legislative extensions, the employee may receive up to an additional 20 weeks of benefits. Be sure to verify duration of receiving UI benefits with your state unemployment agency.

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