Law ScalesWho is Entitled to Unemployment Compensation?

The short answer is that virtually every employee is eligible to receive unemployment benefits.  Whether a particular employee is entitled to those benefits depends on the reason why he became unemployed and his post-employment efforts to find suitable work.

Unemployment benefits protect employees who become involuntarily unemployed through no fault of their own.  Employees are entitled to unemployment benefits regardless of whether they are paid by a salary, hourly rate, piece rate, or commission.

Independent contractors are not entitled to unemployment benefits.  The law classifies workers based on their responsibilities and not their titles.  Independent contractors are in business for themselves and work for a number of different people. They are, as the title suggest, independent in determining how and when to perform their work.  The more control the general contractor has over the terms and conditions under which the work is done, the more likely it is that its workers are employees rather than independent contractors.

An employee is entitled to receive unemployment benefits when he becomes voluntarily unemployed through no fault on his part.  In addition, the terminated employee must meet certain requirements to maintain eligibility:

  • Physically able to work – A claimant must be physically able to perform suitable work.
  • Available for and actively seeking work – A claimant must be seeking employment that she is qualified to do in a manner that provides her with a reasonable opportunity to obtain work. A claimant may be denied benefits if she restricts her availability to seek work because of retirement, school attendance, dependents’ care or other family responsibilities, transportation problems, or unrealistic work hours or wage demands.
  • Must not refuse an offer of suitable work – A claimant who refuses a bona fide offer of suitable work without good cause will be denied benefits.
  • “Waiting week” claim – The first week during which a claimant meets all eligibility requirements is known as the “waiting week.”  A claimant is not eligible for benefits during the waiting week.
  • Severance Pay – A claimant is not entitled to receive benefits during any week where he receives severance pay or other compensation that exceeds the amount of the unemployment benefits.B.    When an Unemployment Compensation Claim is contested

The employer receives notice when the former employee files a claim seeking unemployment benefits.  A paid claim is charged against the employer’s account, so each paid claim may increase the premium that the employer pays for unemployment insurance.  The employer may contest claims that are not legally valid to help maintain an appropriate premium rate.

An employer will contest the claim if the employee never worked for the employer, or was employed most recently by another company. Other reasons are if the employee is ineligible for unemployment benefits because she retired, left the job to attend school, or decided to care for family members.  An employer may, and probably will, contest the claim if the employee quit without good cause or abandoned the job.

An employee is eligible for benefits even if she quit, if it is found that she quit for good cause.  For example, if the employee quit because of workplace discrimination or because of intolerable hours or working conditions, she is eligible for benefits.  If he quit in lieu of being fired, the employee may also be entitled to benefits.

A former employee may be eligible for benefits even if he was terminated for good cause.  For example, if an employee was hired because he seemed to have the requisite skills for the position but in fact did not, the employee is eligible for unemployment benefits if fired for not being able to handle the work.  On the other hand, if the employee refuses to do his work, consistently fails to arrive on time (without legitimate reason), or engaged in work place misconduct, the employee is ineligible for benefits.

Other reasons why an employee may be ineligible for benefits are:

  • frequent absenteeism or tardiness without good cause
  • inability to do the job because of intoxication or sleeping on the job
  • insubordination
  • inappropriate behavior, including abusive language, fighting, or harassment of co-workers