by Daniel J. Gansle

Created on: March 03, 2009

Before answering the question of whether a person is eligible for unemployment insurance if they are fired in the United States, two important terms must be defined.

Unemployment insurance actually refers to the overall system whereby employers pay the Internal Revenue Service (IRS) state and federal unemployment tax to fund unemployment benefits and workforce programs. Thus, the person files for unemployment benefits, not insurance per se.

The next distinction that must be made is "fired" versus "laid off". Fired means the person is separated from the company for disciplinary reasons, while laid off means the person is let go from the company through no fault of their own because of the company's poor financial situation.

That having been said, employees in the U.S. cannot receive unemployment benefits if they are fired from their job for poor work performance. However, those caught up in layoffs through no fault of their own are precisely who the U.S. unemployment insurance system was created for.

U.S. Department of Labor Unemployment Benefits Eligibility Criteria

According to the U.S. Department of Labor, in order to be eligible for unemployment benefits the person must

* meet the respective state's requirements for wages earned or time worked during the base period (typically the first four out of the last five completed calendar quarters prior to the time that the claim is filed)

* be determined to be unemployed through no fault of his or her own as determined by state law, and meet other eligibility requirements as set forth by the respective state.

Unemployment benefits for laid off workers in the U.S. can run up to 26 weeks (6-1/2 months) with the possibility of extension in severe recessionary economic contractions such as we see today. To continue eligibility in receiving unemployment benefits, the person must

* file weekly or biweekly claims and be available to respond to questions concerning continued eligibility

* report any earnings from work (for example if the person has a part-time job)

* report job offers or refusal of work during the week

* report to their local unemployment insurance claims office if requested by the state's employment commission (benefits may be denied for no-shows)

The Purpose of Unemployment Insurance

The unemployment insurance program was created in 1939 as a result of the Federal Unemployment Tax Act (FUTA). Its purpose is actually twofold.

The primary purpose behind unemployment insurance is to provide a safety net for people who are suddenly cut off from their source of income due to layoffs. The secondary purpose is to provide a stimulus to the economy in times of recession so that workers are able to continue to spend money using their unemployment benefits.

In summary, workers who are fired for disciplinary reasons are not eligible for unemployment benefits. However, persons who (through no fault of their own) are caught up in layoffs due to the company's poor financial situation are eligible and can file for unemployment benefits online, in person, or by phone.

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