If you are a U.S. worker who has recently lost your job, you may be in need of the safety net provided by the unemployment insurance system.
Filing for unemployment insurance is a sometimes complicated, but necessary, step for an American worker who is without income. It is not a benefit for people who quit, resign or get fired. Instead, it is for employees who lose a job through no fault of their own, like a business closing or laying off workers.
Because of this, money expert Clark Howard wants to assure you that there is no shame in applying for unemployment insurance.
Any perceived stigma surrounding “taking money from the government” doesn’t really apply to this insurance, which actually is funded by employers through a tax.
“Employers pay premiums over time during the good years to provide for those who get laid off in lean times. It’s not beneath you to accept this insurance money,” Clark says.
So as you decide whether or not you need the aid of this insurance, Team Clark has answers to some of the questions that may be at the top of your mind.
9 Things to Know Before You Apply for Unemployment
- What Is Unemployment Insurance?
- Do I Qualify for Unemployment Insurance?
- How Do I Apply for Unemployment Insurance?
- Do I Have to Wait Until I Can Apply for Benefits?
- How Long Until I Receive My First Unemployment Check?
- How Much Will My Unemployment Check Be?
- What Do I Have to Do to Keep My Unemployment Benefits?
- How Long Can I Receive Unemployment Benefits?
- Will I Owe Taxes on My Unemployment Check?
Team Clark called upon the expertise of retired unemployment benefits expert John Marcinko. He spent more than 30 years working for the State of Georgia’s Department of Labor and Department of Revenue, including helping workers through the Great Recession of the early 2000s.
Note: The coronavirus pandemic has put a strain on the American economy and may cause a significant shift in the way that unemployment benefits are handled. We will do our best to keep the applicable changes to policy due to the COVID-19 virus accurate in this article. However, you may want to visit the United States Department of Labor’s official website for the most current information.
1. What Is Unemployment Insurance?
Unemployment insurance is intended to serve as a short-term and temporary income replacement for Americans who have lost their jobs. It is a program that is funded by employers through unemployment taxes that are levied and collected primarily by each state’s government (in accordance with federal guidelines).
According to the United States Department of Labor, the Federal-State Unemployment Insurance Program “provides unemployment benefits to eligible workers who are unemployed through no fault of their own (as determined under State law), and meet other eligibility requirements of State law.”
Each state’s department of labor is responsible for reviewing cases and administering unemployment benefits to workers who are impacted in their state.
2. Do I Qualify for Unemployment Insurance?
Each state has eligibility requirements that you must meet prior to qualifying for unemployment benefits, but there are some overarching federal guidelines that are followed by everyone.
According to the U.S. Department of Labor, the following are general guidelines for qualifying for unemployment that apply to most states:
- You must be unemployed by no fault of your own. That means people who quit their job, tender resignation or are fired for cause likely are not going to qualify. The term “lack of available work” is used as a valid reason for departure, which would apply to financially-driven layoffs.
- You need to meet work and wage requirements. This is in reference to whether or not you were employed long enough to be considered for the benefits, and also if your income was within the range for receiving benefits. These can vary by state, but the U.S. Department of Labor offers the following as a rough guideline: “In most states, this is usually the first four out of the last five completed calendar quarters before the time that your claim is filed.”
Ultimately, you’ll want to check with your local unemployment office after separation from your employer to inquire about the qualifications for your state’s program.
What if I Quit or Am Fired From My Job?
If you have quit, resigned or were fired from your place of employment, you typically are not going to be eligible to collect unemployment benefits. You must lose your job “through no fault of your own” in order to qualify for these benefits.
Marcinko says there are “very, very rare circumstances” where some exceptions could be made for the above scenarios, but that likely would involve an appeal. And in states where it is employ at-will, he notes that “an employer can separate you at any time for any reason or for no reason at all.” That could make winning an appeal tough in those states.
If you apply for unemployment and feel you are wrongly denied, you should contact your state’s labor office to begin the appeal process.
Coronavirus implications: Per Career One Stop, which is sponsored by the U.S. Department of Labor, the following adjustments have been made at the federal level that could impact eligibility for unemployment insurance:
“The federal government is allowing new options for states to amend their laws to provide unemployment insurance benefits related to COVID-19. For example, federal law allows states to pay benefits where:
- An employer temporarily ceases operations due to COVID-19, preventing employees from coming to work
- An individual is quarantined with the expectation of returning to work after the quarantine is over
- An individual leaves employment due to a risk of exposure or infection or to care for a family member
In addition, federal law does not require an employee to quit in order to receive benefits due to the impact of COVID-19.”
The federal government is also, for the first time ever, extending the potential to collect benefits to gig-economy, freelance and furloughed workers. That means, depending on your role, you may be able to collect a federally-backed unemployed insurance without actually losing your role permanently.
3. How Do I Apply for Unemployment Insurance?
Unemployment is often a national discussion, so you may be surprised to learn that it actually is a process that is handled by individual states. That means you’ll need to check in with the department of labor for the state in which you reside to apply for benefits.
Team Clark has a handy guide for getting started on your application with any of the 50 states. You can apply in-person at unemployment offices, but you can also check with your state to see if there is an online application option during times of required social distancing.
Each state’s requirements for personal information will be a little bit different, but here are some things you should have prepared to provide before contacting your state:
- Full name and date of birth
- Social Security Number
- Personal contact information: Address, phone number, email address
- Employment history: States may want things like contact information for former employers, occupational history, and salary information
Marcinko notes that the point of contact at your local unemployment office will guide you through the process of gathering all the necessary information required by your state as they help you through the application process.
4. Do I Have to Wait Until I Can Apply for Benefits?
In most states: No!
In fact, Marcinko says it was not uncommon to see workers coming into an unemployment office the same day they were separated from their employer. Others can take weeks to apply if they are trying to work out a way to stay on with their employer or if there is a state-mandated waiting period.
Marcinko’s recommendation is that you contact your local unemployment office as quickly as possible after receiving news of employment separation. After all, the sooner you get approved, the sooner you’ll see your first check. That leads us to the next question that’s probably on your mind…
5. How Long Until I Receive My First Unemployment Check?
According to the U.S. Department of Labor, you can expect to see your first benefit check 2-3 weeks after successfully filing your claim.
Coronavirus implications: If you’re worried about potential delays in the application process due to high volumes of potential layoffs during the COVID-19 pandemic, Marcinko’s recollection of handling high volumes through the Great Recession may calm your nerves.
Marcinko says that there was not usually a backlog in terms of processing applications during the Great Recession, noting that it is a fairly automated process once the local unemployment office submits your information to the state. He recommends getting in contact with your local unemployment office as quickly as possible to ensure the application process gets started quickly.
“Let the system work,” he says. “This situation we’re in right now is not permanent. In fact, it may have a very short lifespan. The most important piece of advice I can give you is to work within the system as best you can as long as it is not being unreasonable or giving you something outside what you think you should qualify for.”
6. How Much Will My Unemployment Check Be?
The short answer: It depends on quite a few factors.
The U.S. Department of Labor offers the following guideline: “In general, benefits are based on a percentage of an individual’s earnings over a recent 52-week period — up to a State maximum amount.”
There are formulas involved in the calculations, which include things like your wages for the previous year, amount of experience on the job and local economic factors. These vary state by state, but the takeaway you need is that you’re likely only to see a fraction of the amount of income you may have been earning while employed.
“Unemployment is not going to replace your salary,” Marcinko warns. “Nor anything close to what your total compensation was.”
Marcinko says you will receive a statement of benefits from your state before you start receiving payments, so you should be able to accurately map out the amount of money you’ll be receiving beforehand.
Coronavirus Implications: In response to the COVID-19 pandemic, the United States Congress enacted the Coronavirus Aid, Relief and Economic Security (CARES) Act on March 27, 2020. This legislature significantly boosts both the amount of money available and people eligible for unemployment claims.
In an unprecedented move, the federal government is making this unemployment money available to furloughed workers, freelancers and gig economy workers (1099 employees), in addition to employees who have been laid off by their employer as a result of COVID-19.
If you fall into one of those categories, you could be eligible to receive $600 per week in unemployment for up to four months. This money, which is provided by the federal government, would be in addition to the unemployment benefits you may qualify for on the state level.
7. What Do I Have to Do to Keep My Unemployment Benefits?
Once you are approved through the unemployment application process, there still is work to do on your part. After all, this is supposed to be a temporary solution.
Marcinko says you can next expect to start communicating with the “employment” side of your state’s labor office. Their goal is to help you get back into the workforce as quickly as possible.
During his time with Georgia’s Department of Labor, Marcinko says, the state required those on unemployment to seek job interview opportunities on a weekly basis as part of the terms to continue receiving unemployment checks. Failure to participate in this part of the program could result in at least a temporary loss of benefits.
“That is the main thing as far as being able to continue to qualify for unemployment benefits. You have to demonstrate a willingness to go back to work. And that’s the thing that keeps unemployment from being an automated process. You have to talk to potential employers and you have to show that you are at least theoretically willing to go out and find work,” Marcinko explains.
In conjunction with requiring a job search, states may also provide resources and training to help you prepare for interviews, find job leads and develop new marketable skills.
U.S. Department of Labor on Continued Eligibility
The U.S. Department of Labor offers the following guidance on things states may require for continued eligibility for unemployment benefits:
“You must file weekly or biweekly claims (after the week(s) has ended), and respond to questions concerning your continued eligibility. You must report any earnings from work you had during the week(s). You must also report any job offers or refusal of work during the week. These claims are usually filed by mail or telephone; the State will provide filing instructions.”
You may also be required to attend regularly scheduled in-person meetings at your unemployment office, with the state holding the right to pull benefits if you fail to attend.
Coronavirus Implications: While each state may handle this differently, Marcinko does note that scheduling in-person job interviews may present a challenge with this pandemic. Strategies like social distancing have forced many businesses into temporarily closing their doors. Most businesses have also temporarily halted travel and may also be considering hiring freezes. Contact your local unemployment office to see if there will be alterations made to required employment searches as a result of COVID-19.
8. How Long Can I Receive Unemployment Benefits?
The standard length of an unemployment benefit is 26 weeks in most states, according to the U.S. Department of Labor. However, there can be special exceptions made during times of high unemployment.
If you gain employment prior to completing your full benefit, you will no longer be eligible to draw a check from the unemployment office.
It also is worth noting that you could be ruled ineligible for benefits prior to the end of your 26-week term due to some of the following:
- Refusing a job offer
- Failing to seek work
- Not being available to start work if it becomes available
- Knowingly making false statements about your job search
Each of these would be open to appeal, if necessary.
9. Will I Owe Taxes on My Unemployment Check?
Yes, most likely.
The money you receive through state-sponsored unemployment insurance is considered taxable income and must be reported to the federal government. Pending your earnings for the year during which you received the benefits, that makes it likely that you could owe on the money you receive through this benefit.
It may be possible to request that your state withhold applicable federal taxes from the unemployment checks you receive to avoid owing money at the end of the fiscal year.