Overview: Unemployment insurance provides temporary financial assistance to workers who have lost their jobs through no fault of their own. Unemployment insurance is administered at the state level (in compliance with federal law), and each state establishes its own rules with respect to amounts, duration and eligibility for benefits.
The Federal Unemployment Tax Act (FUTA) requires employers to pay a federal tax of six percent of the first $7,000 paid to each employee. Most states also require employers to make additional contributions. Only a handful of states require employees to make contributions to unemployment insurance.
Eligibility for benefits varies by state, but in most states unemployed workers must:
Benefits are generally a percentage of earnings over the most recent 52 weeks up to a state maximum and are usually paid for up to 26 weeks. Additional benefits may be provided during periods of high unemployment.
Trends: While employees who quit their jobs generally are not entitled to receive unemployment benefits, some states make an exception for employees who quit due to domestic violence, including Arizona, Arkansas, California, Maryland, New Jersey, Texas, Washington and, beginning October 5, 2014, Minnesota.
Author: Tracy Morley, SPHR, Legal Editor
Updated to include information on supplemental guidance released from the New York Department of Health and Department of Labor regarding COVID-19 sick leave for health care employees.
Updated to include information on COVID-19 testing requirements.
Updated to include Form W-2 reporting requirements for EPSLA and EFMLEA credits under IRS Notice 2020-54.
Updated to reflect an amendment to the Florida Civil Rights Act.
Updated to reflect amendments regarding seasonal employment, effective July 1, 2020.
Updated to reflect amended quarterly reporting and penalty provisions, effective July 1, 2020.
This chart summarizes state documentation requirements that an employer must provide upon an employee's separation from employment relating to unemployment compensation notices, mini-COBRA and other end-of-employment obligations.
Updated to reflect the forthcoming Short-Time Compensation Program.
HR guidance on laws governing unemployment insurance.