Unemployment insurance is a type of benefit offered to those who lose their jobs and need a source of income while searching for another job. Most types of unemployment insurance are offered by states, and as state programs they can vary considerably, especially when it comes to compensation rates. Each state uses its own formula to decide how much to pay individuals that qualify, based on previous compensation rates. Fortunately, consistency among the different plans allows individuals to get a good idea of their unemployment situation.
Benefit terms refer to the periods of time that unemployment benefits consider when computing pay. Most plans use the week as a starting point for payment. How much the employee earned per week controls how much unemployment they are eligible to receive per week. If an employee earned varying rates per week due to commissions or another type of variable compensation, states typically average out their pay to create a weekly amount. These weeks are part of a 52-week year that the plan uses for the unemployment period. The plan may only allow people to claim unemployment for half of this year, although renewal options may be a possibility.
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Pay Averages and Percentages
Unemployment does not pay 100 percent of the wages the individual once earned. State laws typically put a maximum percentage in place, often between 70 and 80 percent of the salary the individual earned per week, but plans factor other data before creating a payment plan, including how much individuals earned, and how long they had been at that payment level. Actual pay percentages may only be around 50 percent of previous salaries.
Other factors make unemployment calculations more complicated. For instance, if the individual owes child support, the state may deduct up to 25 percent of the weekly benefit amount. If the individual works a part-time job while looking for a full time job, the state will use a calculation to reduce payments. This calculation typically adds a dollar amount to the weekly benefit ($5 to $20), then takes a percent of the weekly income made in the part-time job (70 to 80 percent) and subtracts the percentage from the new weekly benefit amount to reduce the benefit payment.
Qualifying and Maintaining Benefits
Most states require individuals to file a claim every one or two weeks that show they are still looking for employment. Individuals must be actively searching for work and must accept any job offer that is suitable for their skills. They may also have to register at unemployment offices to show they are trying to find a job. Certain types of job loss, such as termination because of fraud or misconduct, are not eligible for any type of unemployment compensation.