How Unemployment Laws Differ in Each State

While some employees may receive severance bonuses when they leave their jobs, others may have to depend on unemployment insurance at some point. Unemployment insurance (UI) is a financial assistance program for individuals who become unemployed due to no fault of their own. Eligible individuals, who are unemployed, receive weekly payment for a set period or until they find a suitable job.

How Unemployment Laws Differ in Each State
These days, finding a new job is not simple or easy. Many individuals have found themselves searching for a new job for up to a year or more. In recognition of this challenge, the unemployment insurance was created to offer unemployed workers time to secure a new job without facing financial distress or feeling forced to accept a job for which they are overqualified. In most states in the US, unemployed workers may receive UI benefits for up to 26 weeks except in certain situations that includes a pandemic or a recession. In this case, the timeline may be extended.

Although the unemployment insurance program is a joint federal-state program, every state administers its own unemployment compensation program, that holds specific rules. In other words; states have the power to set their eligibility requirements, weekly or maximum benefits, and timeline.

Unemployment Insurance Eligibility Requirements

Every state unemployment compensation program differs, and not every unemployed individual is eligible to receive UI benefits. Most of the time, states impose eligibility rules to reduce individual risk by requiring claimants to meet three conditions:

  • be involuntarily jobless through no fault of their own;
  • earned a certain amount of money during a base period before becoming unemployed; and
  • be able, willing, and actively seeking jobs.

The biggest difference among states is the difference in the level of recent income needed to qualify for unemployment insurance benefit. For example, states differ in their choice of the base period of employment used to determine UI eligibility.

In addition, the unemployment compensation program is not designed to cater to all unemployed individuals; it does not cover individuals who voluntarily resign from their jobs, are fired for workplace offenses, or who are looking for their first employment. The manner in which these conditions are interpreted vary among states.

Duration of Unemployment Benefits

Before the economic recession of 2007, the average duration of benefits for unemployment insurance recipients was 15 weeks. In recent years, the number of weeks available to workers is based on their past earnings and how evenly those earnings were shared over the base period. Many UI beneficiaries qualify for less than the maximum duration of weeks due to irregular work and earning history.

Before the recent changes in several state laws were made, UI programs had been paying unemployment insurance benefits for a maximum duration of 26 weeks. However, there is no federal law that requires states to set their UI benefits to a maximum of 26 weeks. Therefore, states have the right to either reduce or increase the duration of UI benefits through their state laws.

Currently, only the state of Montana and Massachusetts offers regular UI benefits beyond the 26 weeks duration. Several states like Georgia, Kansas, Missouri, Florida, South, and North Carolina offer some of the lowest UI benefits duration in the country.

Unemployment Insurance Benefit Amounts

Unemployment compensation benefits are designed to cater to lost income due to the loss of a job. So, the UI benefit amount an individual receives will depend on their past earnings. States use different methods to calculate UI benefit amounts a worker is entitled to and the duration in which they will be receiving these benefits. However, all states take into consideration the worker’s previous earnings in some way. For some states, the focus is on the individual’s previous annual earnings; others look at the workers’ income during the highest paid quarter of the base period.

All states follow a specific formula when it comes to deciding on the total weekly benefit amount. A standard method is to pay half of what an employee earns in relation to the average earnings in the state. Currently, the average unemployment insurance weekly benefit is a little above $300. Something to keep in mind is that in most states, individuals may be eligible for higher benefits if they have dependents.

If you or your family has been recently made unemployed due to the COVID-19 pandemic, please check out to the California Unemployment Insurance Program and their eligibility requirements.

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