center top background

Unemployment Insurance - Eligibility

Reason for termination:

If an employee’s employment is terminated due to no fault of his/her own, he/she may be eligible for UI. However, an eligibility criterion greatly depends upon the state in which the person was working and seeking UI.

The unemployed person must meet state requirements for wages earned or time worked during an established period of time, referred to as a “base period.” Generally, this period is the first four out of the last five completed calendar quarters prior to the time the UI claim is filed.

Employees ineligible for Unemployment Insurance:

Disqualification from UI benefits vary from state to state, and the employee should consult an attorney or the unemployment office before pursuing his/her case.

Generally, if the employee quits his/her job, he/she is not entitled to UI. To claim UI after quitting a job, the reason should be for a good cause—such as inhuman conditions at the work place, or a bad incident that makes a sensible employee quit. It doesn’t hurt to try and collect UI benefits, but the situation has to be pretty bad and the employer has to be given an opportunity to correct the conditions. When the employee belongs to a union and is covered by a collective bargaining agreement, the help of the union can be sought to correct the conditions or to determine whether refusing to work under illegal or certain conditions would be permitted under the labor agreement or the law.

Good causes for quitting include:

  • Hazardous working conditions
  • Failure to pay earned wages
  • Illegal harassment
  • Forced to engage in illegal conducts.

Engaged in misconduct - If the person is engaged in misconduct at his/her work place and fired because of that, he/she is ineligible to apply for UI. Generally "misconduct" means mismanagement of a position of employment by action or inaction, neglect that places in jeopardy the lives or property of others, intentional wrongdoing or malfeasance, intentional violation of a law, or violation of a policy or rule adopted to ensure orderly work and the safety of employees. It does not include an act of misconduct that is in response to an unconscionable act of an employer or superior.

Severance Pay - If the employer has paid a severance package to the employee after his/her employment was terminated, this might make the unemployed person ineligible for UI claims. Severance is considered as income. As part of severance pay, if the exemployee’s name stays on the payroll for a certain number of weeks after the termination of employment, this makes the person ineligible for UI benefits.

In case of a lump-sum payment, the person may or may not be entitled to UI benefits. If it is up-front payment for a number of weeks, then the UI agency will consider it to be salary continuation. For the number of weeks of severance received, the person will be ineligible to receive UI benefits. However, it is better to keep ready the paper work and apply for UI after the employment is terminated. If still unemployed and severance pay ends, the completed paper work can speed up the process of payment.

Union employees - Union employees who lose their jobs because of a labor dispute—strike, lockout, etc.—are considered ineligible for UI by some states. In some other states, there is a distinction made between disqualifying strikes and lockouts that make employees eligible.

Usually, unions have strike funds that provide reasonable compensation for wages lost from the strike. It is better to consult union representatives to find out if it was a strike or a lockout, and what the state law is with respect to that. If there is any doubt, it is better to file for UI.

Whom to contact?

To claim UI, a local state unemployment office must be contacted. The office will guide the employee through the process of claiming unemployment benefits (e.g., claim forms, documents required) and should be contacted after termination of employment. (You can apply for unemployment insurance with the help of the form available on this site.)

Who are not covered by UI?

Those not covered include the self-employed, independent contractors, casual employees, and farm workers.

know your rights now!