Unemployment benefits are a series of weekly paychecks that workers can receive if they have been let go from their jobs and are currently looking for new employment. Unemployment benefits are a federal entitlement program, meaning that anyone who meets the criteria necessary to receive the benefits can receive them. While employers are generally required to pay money to the state to pay for these benefits, an employee will not be denied benefits if his employer fails to contribute.
Unemployment benefits, although part of a federal program, are administered individually by each state. To fund these benefits, states charge employers fees or taxes. While the exact funding process is different for each state, employers are required to pay into this employment fund. However, whether a person can receive benefits does not depend on whether his employer chooses to comply with this law. A employee can still draw benefits if his employer did not make payments.
Before a person can receive benefits, he must apply to the state. The state will then determine if he meets the eligibility criteria. Some positions are not eligible for unemployment benefits, and in some cases, a person may work for an employer who does not need to make payments to the state. However, whether a person receives benefits or not will never hinge directly on whether a person worked for someone required to pay into the system.
If an employer fails to pay into an unemployment fund when he is legally required to do so, he may face a number of penalties. These penalties are usually financial, and may include punitive fees or interest assessed on the money he owed and did not pay. However, the state will never punish a company's employees for working for an employer that failed to abide by his legal obligations.
A company's employees will never be denied benefits based on whether his employer has complied with the law. However, if a person is entitled to certain employer-issued benefits upon termination, such as severance pay, and the employer fails to adequately fund the mechanism under which the person is supposed to be paid, then he may have difficulty collecting. He is still legally entitled to these benefits, but he may need to file a civil suit to receive them.