Every state offers unemployment insurance (UI) benefits to eligible workers. During the COVID-19 pandemic, the federal government is also stepping up to help. The federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act), for example, opened up eligibility for the first time to freelance workers, gig workers and independent contractors and extended the payment period.
But that doesn't – and wasn't intended to – make UI a universal benefit. Some workers will still be unable to collect unemployment. While each state has its own eligibility rules, there are some reasons for disqualification that apply to most states.
Getting Fired for Misconduct
Almost every state defines their unemployment insurance program as intended to assist those who are out of work through no fault of their own. This phrase means that employees who are laid off or furloughed due to company financial issues are eligible for UI, while those tossed out for behaving badly are not. Getting fired will not automatically disqualify an employee for unemployment; the question is whether they were fired for misconduct. It is being unemployed due to their own fault that is the factor that disqualifies a worker.
How does this work in practice? Each state has its own rules defining misconduct, but, in general, a worker fired for wrongdoing, such as being frequently late, missing work without good cause or showing up for work drunk will not be eligible for unemployment benefits. On the other hand, a worker may be eligible for benefits if they were fired for some other reason than misconduct. For example, if a new employee turns out to be a poor fit or lacks skills for the position, they can still apply for unemployment benefits if otherwise eligible.
Quitting for Personal Reasons
The requirement that a worker be out of a job through no fault of their own is also an issue when an employee voluntarily quits. If a worker quits a job, they automatically can be said to have had some hand in ending up unemployed. Had they not quit, they would still be working.
But quitting a job does not always make the individual ineligible for unemployment benefits. In most states, the worker's eligibility depends on the reason they quit. Workers who quit their jobs for personal reasons usually cannot get unemployment benefits. That is the case even if those personal reasons are admirable, like quitting to take care of a new baby or to pursue a lifelong dream of writing a novel.
But when an employee had good cause to quit – a reason that would make any reasonable individual resign – they may still get UI benefits. For example, if the enterprise stopped paying workers or if employees were assigned new and onerous duties without extra wages, they may claim good cause.
Federal Pandemic Unemployment Assistance During COVID-19
Note that the federal government enacted several laws to assist workers when the country was shut down because of the coronavirus pandemic. These impact many aspects of UI eligibility including the element of fault. The first law to be enacted was the CARES Act. It expanded unemployment eligibility for those who lost work due to COVID-19, provided supplemental payments to them, and extended the duration of those payments.
The federal benefits provided under the CARES Act have been extended and amended. The federal government currently provides an additional $300 weekly benefit amount in supplemental unemployment benefits for anyone who lost their job or had their hours reduced due to COVID-19; is unable to work because they have COVID-19; was exposed to COVID-19 and is awaiting test results; is caring for a family member with COVID-19; or is looking after a child whose school is closed because of COVID-19. The program currently runs through September 6, 2021.
Not Working Enough
To be eligible for state unemployment benefits, an individual must have been employed. Obviously, someone who has never worked at all is not eligible. Under state laws, the worker must have been an employee of a company who paid into the UI fund, but independent contractors and gig workers are included under the federal CARES Act.
Claimants generally must have worked for a minimum qualifying period before they become eligible to make an unemployment claim and, during that time earned a specified minimum amount or worked a specified minimum number of hours, or both. This is intended to prevent workers from getting UI payments after just a week or two on the job.
Base Periods for Benefits Eligibility
Georgia law establishes a base period for eligibility that is based on calendar quarters, or three-month segments: the earliest four of the five complete calendar quarters just prior to a benefits claim. To be eligible for UI benefits, the worker must have earned wages of at least $1,134 in two or more of these four quarters and earned wages in the total base period of at least 150 percent of the wages earned in the highest quarter.
Oregon defines the base period in the same way as Georgia – the first four of the past five calendar quarters, counting back from the date the initial claim is filed. But eligibility requirements in Oregon are different. To be eligible for UI benefits in that state a worker must have worked at least 500 hours or have received pay of at least $1,000 from an employer during this base amount of time.
Collecting UI for Maximum Period
Unemployment insurance is intended to help a worker who is temporarily unemployed until they find new work. It is not meant to support the worker forever. Every state sets a cap on the number of weeks an individual can get benefits. The vast majority of states allow 26 weeks of benefits. Some states permit workers to seek extensions of this period for good cause, which, if granted, extend the time by 13 or 20 weeks. However, once that time is over, a worker cannot collect additional UI benefits even if they haven't been able to find work.
Each of the federal pandemic assistance bills have extended the weeks of UI available beyond the weeks specified in state laws. The federal American Rescue Plan Act extends supplemental pandemic benefits of $300 a week through September 6, 2021 and increases the total number of weeks of benefits available from 50 to 79.
Being Unavailable to Work
Unemployment insurance is intended to serve as a financial bridge between jobs for workers who find themselves unemployed and who are actively seeking a new job. It is not intended to finance an individual's vacation or downtime. To that end, all states require that a worker be available to work and be physically and mentally able to work in order to be eligible for unemployment benefits.
How is this interpreted? Different states provide different tests of whether someone is able and available to work. For example, in Arizona, workers who are pregnant are presumed to be unable to work during the period running from eight weeks before the calculated date of delivery to six weeks immediately following delivery. Likewise, in Arizona, full-time students during the most recent regular school term are presumed to be unable to work.
Being available for work doesn't mean that a worker is disqualified if they are ill or busy for one day. Most states do make allowance for a sick day or two. Arizona, for example, allows a worker to remain eligible for UI if they are physically unable to work or engaged in activities which would prevent them from working as long as the period involved is not more than one full calendar day.
Not Actively Seeking Work
A worker has to be actively seeking work in order to continue getting UI benefits. In most states, this means making job contacts every week that are reported to the state's unemployment department. The state may check with the contacts to make sure the worker actually did make the contact as reported. A worker offered a suitable job, requiring the same level of skill as their prior job at approximately the same wages, must accept it.
Federal pandemic rules have also changed this requirement. Under the CARES Act, a worker can continue to receive pandemic-related unemployment benefits if that worker is unable to work because:
- They are ill with COVID-19.
- They might have been exposed to coronavirus.
- They were ordered to stay home by a doctor to prevent the risk of getting exposed to, or spreading, coronavirus.
- Their employer shut down or cut back their business due to coronavirus.
- They were advised not to work by public health officials.
- They must care for a family member or other person they live with who is sick with coronavirus or is required to stay at home.
- They must care for a child due to the closure of schools.
Any of these reasons are incompatible an aggressive job search. In fact, during the COVID-19 lock down, many businesses were closed and not seeking new employees.
Not Certifying Every Two Weeks
With unemployment compensation benefits, it isn't one and done. One of the eligibility requirements for continuing benefits is a bimonthly certification. This is a statement that everyone getting UI benefits must fill out and sign under penalty of perjury. In it, an individual must list any work they did or wages they received during the period of time. They must also affirm that they continue to met the eligibility requirements to collect benefits.
Anyone who fills out an unemployment certification with incorrect information in order to get UI benefits is committing fraud. This includes not reporting wages or withholding information. If a worker is caught committing fraud, they are subject to penalties including losing benefits, paying back prior benefits and fines, and possible criminal prosecution. It is even possible for the worker to get sent to jail.
Collecting Severance Pay
Severance packages or pay are not given as part of every layoff, but these payments are extremely helpful to those who do get them. Severances are amounts of money given to some workers when they are discharged. They can be lump sum payments or periodic payments, and are much appreciated by workers who are no longer earning wages.
However, in many states, receipt of severance can disqualify a worker from receiving unemployment insurance benefits. In some states, a worker getting a severance package is not eligible for any UI benefits; in others, they are disqualified only for periods in which they get the payment.
Some states, like Georgia, divide a lump sum payment by the worker's average weekly salary and disqualify them for that many weeks. In states like Georgia, a worker cannot get UI benefits for any week in which they receive a severance payment that is more than the weekly UI benefits they are eligible for. For example, if the severance package was eight times the amount of the worker's average weekly earnings, the worker would have to wait eight weeks before starting to collect unemployment benefits.
Teo Spengler earned a J.D. from U.C. Berkeley's Boalt Hall. As an Assistant Attorney General in Juneau, she practiced before the Alaska Supreme Court and the U.S. Supreme Court before opening a plaintiff's personal injury practice in San Francisco. She holds both an M.A. and an M.F.A in creative writing and enjoys writing legal blogs and articles. Her work has appeared in numerous online publications including USA Today, Legal Zoom, eHow Business, Livestrong, SF Gate, Go Banking Rates, Arizona Central, Houston Chronicle, Navy Federal Credit Union, Pearson, Quicken.com, TurboTax.com, and numerous attorney websites. Spengler splits her time between the French Basque Country and Northern California.