Labor and Employment

Overview of Unemployment Compensation

By Lisa Guerin, ​J.D., Boalt Hall at the University of California at Berkeley
Learn the basics of unemployment compensation, including eligibility, benefits, and how and when to file.

For the average worker, losing a job can quickly turn into a financial crisis. How will you pay the mortgage or rent or buy groceries without a steady paycheck? How will you support yourself and your family while you look for a new job?

Fortunately, most employees can get some temporary financial help by filing a claim for unemployment compensation (also called unemployment insurance, unemployment benefits, or simply unemployment). Every state makes unemployment benefits available to employees who lose their jobs through no fault of their own. However, you have to apply for benefits, meet the eligibility requirements, and search diligently for a new job in order to qualify.

What Is Unemployment Compensation?

Unemployment compensation is a joint federal-state insurance program that provides those who are temporarily out of work some wage replacement while they look for a new job. Each state runs its own unemployment compensation program. Although these programs all have a similar structure, each state has its own rules about eligibility for benefits, filing a claim, how much money applicants receive, and how long benefits last (among other things). The federal Department of Labor oversees the whole process and helps pay each state's costs of running their programs.

Only employees are eligible for unemployment benefits. You can’t collect unemployment if you were working as an independent contractor.

Eligibility Requirements for Unemployment

To qualify for unemployment compensation, you must meet two basic requirements:

  • First, you must have earned a minimum amount of money, worked for a minimum amount of time, or both during a set period of time before losing your job. This period of time, called the “base period,” is a 12-month period, usually the earliest four of the last five complete quarters of the calendar before you became unemployed. (In other words, the base period usually ends at least a few months before you lose your job.)
  • The second requirement has to do with why you are unemployed. You may collect benefits only if you are out of work without fault. You may not be eligible for unemployment if you quit your job voluntarily, without good cause, or if you were fired for misconduct.

What Is Good Cause to Quit?

Each state has its own definition of good cause to quit. In some states, including California, good cause to quit includes reasons not related to work, such as family caretaking responsibilities. In other states, your reason for leaving work must be related to your job. You will likely be found to have quit for good cause if you leave your job because of:

  • unsafe or unhealthy working conditions that persist after you’ve told your employer
  • harassment or discrimination that your employer won’t remedy, or
  • your refusal to participate in illegal conduct.

On the other hand, you will likely be found not to have quit for good cause (and therefore, ineligible for unemployment benefits) if you quit because you want to go back to school, you want to travel, or you are bored with your current job.

Getting Fired for Misconduct May Disqualify You

What type of job misconduct is serious enough to make you ineligible for unemployment compensation? Again, it depends on your state’s law. Generally, you must be fired for conduct that goes beyond simple poor judgment, personality conflicts, or performance problems stemming from your inability to do your job. Examples of serious misconduct include:

  • frequent unexcused absences or lateness
  • insubordinate behavior (such as cursing at your supervisor or refusing to do assigned work)
  • stealing or dishonesty, or
  • drinking or drug use in the workplace.

How to File for Unemployment Benefits

You should file an unemployment compensation claim with your state agency as soon as you've lost your job. It sometimes takes several weeks to start receiving payments, so the sooner you file, the better.

In virtually every state, you can file a claim online. Some states also allow you to file for benefits by phone or in person at your local unemployment office. You’ll find information and filing instructions at your state unemployment agency.

Shortly after you file, you will receive a notice of eligibility from the agency. This notice will let you know whether you meet the state’s monetary requirements and how much you can expect in benefits. If there is a dispute about whether you are eligible for benefits (for example, because you say you were laid off and your employer says you were fired for misconduct), the agency may hold a hearing to decide the issue.

What Benefits Will You Receive?

Regular unemployment benefits are paid for 26 weeks in most states. Some states, including Florida, provide benefits for a shorter period of time. Extended federal benefits are available in areas where the unemployment rates are high. Currently, these extension programs are not in effect.

Benefits might also include training programs, access to job listings, and other assistance in finding a job.

Maintaining Your Benefits

You may lose your benefits if you don't follow your state agency’s rules on looking for work. For example, while receiving unemployment benefits, you must:

  • be able and available to work
  • actively look for a job each week, and
  • report to your state agency any job offers you receive, any job offers you decline, and any wages you make each week.

Your state agency might require you to report all of the jobs you apply for, keep a record of your job search, or register for work through a state jobs portal.

Questions for Your Attorney

  • My claim for benefits was denied; can I appeal the decision?
  • Can I still collect unemployment if I received severance pay when I was laid off?
  • Can my employer ask my to give up my right to collect unemployment in exchange for a better severance package?

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