Losing your job can be scary, especially if you live paycheck to paycheck. Housing and living costs are on the rise, and time without income can be a big stress. Fortunately, you may qualify for Unemployment Insurance (UI) payments if your previous employer pays UI taxes.
Most businesses are part of the UI program, and several former employees are eligible to collect benefits. However, some companies are exempt from the requirement, and some ex-workers cannot receive benefits because of how their employment ended.
The Department of Labor (DOL) oversees UI programs throughout the country and territories. Almost all employers must pay federal and state unemployment taxes. The funds from these taxes are the benefits out-of-work employees receive. Employees do not pay UI taxes.
The government exempts some businesses from paying these taxes. Nonprofit organizations that have a 501(c)(3) status do not have to pay UI taxes. An employer also does not have to pay UI taxes if they hire their parent, spouse, or child younger than 21 years of age.
Each state has different eligibility requirements. Some areas require you to participate in work training or other programs. The basic requirements include the following:
- You are out-of-work or have reduced hours through no fault of your own.
- You worked for at least your state’s minimum time period.
- You earned at least your state’s minimum wage amount.
- You are actively seeking employment and available and able to work.
The government has made new regulations because of COVID-19. For example, self-employed and gig workers can now collect benefits. Other conditions that allow out-of-work individuals to qualify for payments include the following:
- Employees who are under quarantine and expecting to return to work.
- Employees who left employment due to risk of exposure or infection.
- Employees who left employment to care for a family member.
- Employees with an employer that stop operations due to COVID-19.
Unemployment benefits do not replace your entire income, and you can only collect payments for a limited period.