Getting Unemployment Insurance: Eligibility Requirements

Unemployment insurance is the technical name for collecting unemployment benefits from your state. Many people get confused about how the system actually works, but it is in every way an insurance fund. Employers and their employees contribute to the fund through withholding from their incomes, much like an insurance premium. When one individual is laid off from a job, he or she can file a claim and begin collecting on the insurance policy. However, not all individual employees are eligible.

Contributions to Unemployment

You must make contributions to the unemployment insurance premium if you intend on being eligible to file a claim. These contributions must be made for at least 6 months before you are eligible. Once you have worked with an employer licensed in the state for over 6 months, and you have contributed to the fund, you will be qualified to file a claim upon your termination. 

Circumstances of Termination

Not all terminations will qualify you for unemployment benefits. You must lose your job involuntarily, and the layoff must not be performance related. Typically, this means your employer needs to provide a statement saying the cause of your layoff was outside of your control. This is often called a "pink slip" job loss. If you are fired for any performance related reason or leave your job voluntarily, then you are not eligible for unemployment benefits. It is illegal for you or your employer to inaccurately report the terms and conditions of your job loss. 

Ongoing Requirements

Once you file a claim, the state will inform you how much you qualify for based on how much you contributed, or your premium. This is very similar to how private health or home insurance operates. The premium you contribute directly relates to the income you collect after you are laid off. The unemployment representative will inform you of exact procedures you must follow to maintain benefits. These include:

  • Continually seeking new employment if you are able to work
  • Paying taxes on your employment checks either throughout the year or at year's end
  • Reporting any income you earn in addition to your unemployment benefits

Unemployment Insurance Fraud

Failing to comply with any of the regulations described above is considered insurance fraud. If you commit unemployment insurance fraud, you will have to give back every penny you received through the benefits. If the sum was large enough or you are found to have committed fraud more than once, you will likely face criminal prosecution for the behavior.

Unemployment Alternatives

Many individuals will find they do not qualify for public unemployment benefits. If you have not been employed for at least six months, are an independent contractor or freelance your work, you are not eligible. You can elect private unemployment insurance, though, in order to fill any gaps in income. You will contribute to this fund the same as a public unemployment insurance fund. The terms for filing a claim are set by each insurer, but they are generally the same as the terms for qualifying for public insurance. Premiums are tax deductible if you operate your own business. 

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