The Hostway Blog

An Overview: Unemployment Benefits

The United States’ unemployment insurance system was designed with two objectives in mind: to provide a weekly check to workers who lose their jobs through no fault of their own and to promote economic stability by rewarding employers who minimize their workforce turnover.

The benefits paid to jobless workers are financed through federal and state unemployment taxes paid by employers. If you fire or lay off workers only when absolutely necessary, use the proper procedures to do it, and routinely contest unemployment benefit claims when you think the worker is ineligible, you may be able to lower your unemployment tax rate. In some states, you may even be able to lower your rate to zero and pay no unemployment taxes at all. However, if your business has a consistent habit of firing people or laying workers off, the taxes incurred on your business may start to highly impact your bottom line.

Which workers are eligible for unemployment benefits?

  • The worker must be truly unemployed.
  • The worker must make a weekly claim for benefits at the local state employment office or online, and respond to any communication or requests from their state’s government office.
  • In most areas the employment office will also help jobless workers in their efforts to find a new position. In this case the worker must cooperate with the office by filing job applications, showing up for interviews, and accepting a suitable position if one turns up through this process.
  • The worker must be ready, willing and able to work.

Which actions can disqualify someone from receiving unemployment benefits?

  • The worker turned down a "suitable" job offer during the period of unemployment.
  • The worker was fired for misconduct. This can mean violation of a specific work rule or violation of an "unwritten rule" that the employee was expected to know.
  • The worker left the job voluntarily, without a good cause connected to the job.
  • The worker is unemployed because of a strike or other work stoppage caused by a labor dispute.
  • The worker is receiving workers' compensation payments, social security payments, a private pension or severance pay.
  • The worker has lied on the benefit claim or has omitted some important information in order to get or increase benefits.

The most important thing to remember if you become unemployed by no fault of your own is to immediately check out what your options are by contacting your local government office for more information. You can also visit the United States Department of Labor website for more information.