Unemployment Insurance Benefits: The 12 Basics You Need to Know

“Dignity is fighting weakness and winning.”

– Lola Falana

ACTUAL “CASE HISTORY”: Patty had been the Laboratory Director of a large regional blood bank. For six years she had been responsible for safe, accurate and efficient testing of blood samples, blood drives and donations, and blood distribution to hospitals in a four-state area. She was a seasoned professional at what she did, enjoyed a good reputation, and enjoyed her work.

Two weeks before calling us, Patty had resigned from her job, in disgust. Though she had never done anything like that before, she just felt she had no alternatives: sanitary standards at the Laboratory’s central location, and its satellite locations, had regressed so much and so rapidly that she was afraid patients were in danger. This followed the outsourcing of housekeeping functions in a seemingly ill-advised cost-cutting measure. She had notified corporate headquarters about her concerns, to no avail.

Patty sought our help in preparing for her upcoming job interviews. What could she say about her reasons for leaving? Should she be honest? What if she gave a false reason, and it was later shown to be false? Could she be accused of “bad-mouthing” her former employer? It was in preparing for these questions, that we learned that Patty had not applied for unemployment insurance benefits, as she believed that, as someone who had “resigned,” she was not entitled to do so. We advised her to apply, nonetheless, because, though she had resigned, she had “good reason” to do so.

Sure, enough, Patty did apply for unemployment, and was found eligible for the benefits her state afforded: $525 per week, for 26 weeks (totaling almost $14,000). Though the assistance did not make her rich, it surely did help pay the bills during her period of unemployment, which lasted much longer than she had expected.

LESSON TO LEARN: Unemployment insurance benefits are valuable and should not be forsaken. As a society, we set up our unemployment insurance system to “cushion the blow” of unexpected job loss. Every employer is responsible for contributing, and every employee is potentially eligible to receive it. Failing to take advantage of what you are entitled to is not a wise thing to do.

WHAT YOU CAN DO: There are many misunderstandings about unemployment insurance benefits. Here are the 12 Basics You Need to Know:

1. State Rules Govern: Though some federal laws affect unemployment benefits, by and large state laws govern eligibility, benefit amounts, and application procedures. For this reason, we cannot provide you with specific information in this newsletter, but general rules only. For specific information, you must check the website of a specific state department of labor. If you live in one state and worked in a different state before your job loss, you should first apply to the state in which you worked. These days, most states have online application procedures. To determine your state’s procedures, type in “unemployment insurance benefits” and the name of your state into Google’s search engine, and chances are you will find out all you need to know.

2. Key to Eligibility: “No Fault” Job Loss: As a general rule, unemployment is available to those who have lost their jobs due to no fault of their own, due to such things as layoffs, plant closings and position eliminations. On the other hand, unemployment benefits are generally not awarded to people who have been fired due to misconduct, absenteeism, chronic lateness or for violating company policies or rules. Likewise, those who resign from their jobs are generally not eligible for unemployment benefits. However, it is important to note that in most states resigning from your job for a “good reason” – including a hostile environment, harassment or illegal practices – permits people to collect benefits, so long as they made a reasonable effort to achieve an abatement or elimination of the problematic condition by, for example, requesting it be stopped, or requesting a reassignment. And, too, if you were fired – but in circumstances in which you were found not to be “at fault” – you probably would be eligible.
3. Alleged Poor Performance will Generally Not Make You Ineligible: Rarely, if ever, will an allegation of poor performance make you ineligible to collect unemployment insurance. The only time it may do so is if your employer can establish that your poor performance was intentional, or resulted from gross indifference to your duties. (Your “failure” to survive a “Performance Improvement Plan” is not fatal to an application for unemployment benefits.)

Want to apply for Unemployment Benefits, but afraid your former employer may oppose your Unemployment Benefits applications? Use our “Model Letter Requesting Employer’s Assurance Not to Contest Your Unemployment Application” with Ten Great Reasons. “What to Say, How to Say It.”™ To get your copy, just [click here.] Delivered by Email – Instantly! 

4. These Days, Applications are Usually Online, or Over the Telephone: In almost all 50 states, filing for unemployment insurance benefits does not require an in-person appearance, entailing what most people dread as a humiliation that lasts a full day, if not more. In cases of contested applications for unemployment, even investigations by labor department personnel are usually conducted over the telephone.

5. Collecting Severance is Usually Not a Bar to Collecting: In almost all states, collecting separation payments, often called “severance” from your former employer is not a bar to collecting unemployment insurance at the same time. There are, though, exceptions: in New York, if your “severance” includes (a) collecting your regular salary, (b) enjoying all of your previous benefits, and (c) they both stop if you get a new job, State Labor officials see that set of circumstances as tantamount to remaining employed, and so deny unemployment benefits on that basis.

6. Collecting Workers Compensation or a Pension Generally is Not a Bar: So long as you did not leave your last job in order to retire, workers compensation and pension collection generally does not bar you from collecting unemployment benefits. However, the amount of unemployment benefits you collect may, in some states, be reduced by amounts collected from other sources such as these.

7. Duration of Benefits is Usually 12 to 26 Weeks – and Often Longer: The amount and duration of your benefits varies from state to state. However, in most times, the range of duration is from 12 to 26 weeks. In difficult economic times, these are often extended, as they were – twice – in 2009, with some unemployed individuals collecting as much as 12 months of unemployment insurance benefits.

8. Trying to Start a Business Is Not, By Itself, a Bar to Eligibility: Some people who are laid off or downsized give serious consideration to starting a business of their own. Doing so, and even taking early steps to start a business, is not necessarily a bar to collecting unemployment insurance in most states, provided (a) you are nonetheless also continuing to seek a job, and (b) the time and efforts devoted to starting your own business do not preclude your looking for employment.

9. Application for Unemployment Benefits Should be Made Upon Termination: If you are not certain of whether you are eligible for unemployment insurance benefits, or you believe you have a possible job that would make unemployment unnecessary, you should still apply as soon as you are terminated. Your honest answers to each of the questions presented on the application will determine your eligibility, benefits level, or other issues of uncertainty for you.

10. Part-time Work is Usually Permissible, But May Result in Partial Decrease in Benefits: To the surprise of many people, most states permit people to collect unemployment insurance benefits while working part time, so long as they (a) continue to seek full-time employment, and (b) remain available for full-time work if it becomes available. In these circumstances, unemployment payments are generally reduced by the amount of part-time income coming in.

11. Employers Can Try to Stop Your Collecting, But the Decision is Not Theirs: You and your employer may disagree on whether you are entitled to collect unemployment insurance benefits. In most states, if your employer does not believe you are entitled to collect unemployment benefits, it must file a formal objection to your claim for benefits, give the reason for its position, and also prove to a hearing officer that it is right. The decision is made, first, by a clerk, then by a “Hearing Officer” if a short “Hearing” is held, and then by an Appeals Board, if either party (employee or employer) wants to take the dispute to this final step.

12. Unemployment Benefits are Generally Taxable as Income: Unemployment compensation is generally considered “income” by federal and state authorities, and taxed as such. In some instances, part of the amount collected is exempted; for example, the first $2,400 in unemployment insurance income in 2009 has been exempted from taxation as part of the federal 2009 Economic Recovery Act.

Applying for Unemployment Benefits can be confusing! Clear the haze, and make sure you don’t forget anything – use our 132-Point Guide & Checklist for Unemployment Benefits. To get your copy, just [click here.] Delivered by Email – Instantly!

These “12 Basics of Unemployment Insurance” are important to know, and good to keep in mind, as they are the source of so many questions by those facing unemployment. Bear in mind, though, that they are generalizations only, as each state has its own rules, regulations and practices, which you can find on its Unemployment Insurance website. Unemployment benefits are valuable rights, and should not be forsaken, or dismissed. Life is such that you never know when you will be in need, or even dire need, so being aware of and familiar with this particular source of support can only help you.

SkloverWorkingWisdom™ emphasizes smart negotiating – and navigating – for yourself at work. Negotiation of work and career issues requires that you think “out of the box,” and avoid risks at every point in your career. Knowing the “12 Basics of Unemployment Insurance Benefits” will help guide you in the “unemployment context.” Learning the “in’s and out’s” of the many other contexts of employment risk are available on our blogsite. Now it’s up to you.

Always be proactive. Always be creative. Always be persistent. Always be vigilant. And always do what you can to achieve for yourself, your family, and your career. Take all available steps to increase and secure employment “rewards” and eliminate or reduce employment “risks.” That’s what SkloverWorkingWisdom™ is all about.

A note about our Actual Case Histories: In order to preserve client confidences, and protect client identities, we alter certain facts, including the name, age, gender, position, date, geographical location, and industry of our clients. The essential facts, the point illustrated and the lesson to be learned, remain actual.

Please Note: This Newsletter is not legal advice, but only an effort to provide generalized information about important topics related to employment and the law. Legal advice can only be rendered after formal retention of counsel, and must take into account the facts and circumstances of a particular case. Those in need of legal advice, counsel or representation should retain competent legal counsel licensed to practice law in their locale.

© 2010, Alan L. Sklover All Rights Reserved. Commercial Use Prohibited.

Print Article