Federal law: 1935 (Social Security Act; Public Law 74-271).

State laws: All states, Puerto Rico, Virgin Islands, and District of Columbia have separate laws creating their own programs. State laws were first enacted between 1932 and 1937.

Type of program: Social insurance system.

Employees of firms in industry and commerce and employees of nonprofit organizations with four or more employees during 20 weeks in a year or that pay wages of $1,500 or more in any calendar quarter in a year. Almost all state and local government workers, household workers, and more than 75% of farm workers are covered. Federal civilian and military employees are also covered.

Exclusions: Some agricultural employees, employees of religious organizations, casual employees, family labor, and self-employed persons.

Special federal system for railroad employees.

Insured person: None, except in Alaska, New Jersey, and Pennsylvania.

Self-employed person: Not applicable.

Employer

Federal tax: 0.6% of taxable payroll. Taxable payroll is defined as the first $7,000 earned by a worker in covered employment annually. (The full amount is 6.0%. However, there is a 5.4% credit if states meet all federal requirements.)

State programs: The standard rate is 5.4% of taxable payroll. Actual rates vary from zero to 10% or more, according to the individual employer's experience with unemployment benefit costs. The first $7,000 to $37,300 (varies according to the state) earned by each worker in covered employment is subject to this tax annually.

Government: Federal tax revenue is used for the federal and state administrative costs of the unemployment compensation program, federal share of benefits paid under the Federal-State Extended Unemployment Compensation Act of 1970, loans to states to pay for unemployment benefits, labor exchange services under the Wagner-Peyser Act, employment and training services for veterans and disabled veterans under Chapter 14 of Title 38 of the U.S. Code, and some labor market information program activities. 

State unemployment contributions are used to pay unemployment benefits.

Unemployment benefits: Most states require minimum earnings in the base period equal to a specified multiple of the weekly benefit amount or high-quarter wages, or a specified total amount of wages in the base period. A few states require a specified number of weeks of employment (for example, from 16 to 20 weeks). One state requires a certain number of hours of work. To be eligible, an unemployed worker must be registered with the employment service, be capable of and available for work, and must actively seek work. An unemployed worker will generally be disqualified for voluntarily leaving a job without good cause, being discharged from employment for misconduct, or refusing an offer of suitable work. Unemployed workers may be disqualified if they are participating in a labor dispute. The length of the disqualification period varies among states and may depend on the reason for disqualification.

Unemployment benefit: The benefit is about 50% of the insured's earnings (usually capped at around 50% of the state's average weekly wage), according to diverse state formulas. The benefit is paid after a one-week waiting period for up to 26 weeks in most states.

Dependent's supplement: About 25% of states provide from $1 to $147 a week for each child and sometimes for other dependents.

Federal law provides for up to 20 additional weeks of benefits in states with high levels of unemployment.

Unemployment assistance: Assistance is available in some states to workers who are ineligible for unemployment benefits because of insufficient periods of covered employment, to unemployed persons who have exhausted benefit rights under the federal and state assistance programs, and to unemployed persons participating in training programs.

Department of Labor (http://oui.doleta.gov/unemploy) administers the program nationally through its Employment and Training Administration and Office of Unemployment Insurance.

Department of Labor
Employment and Training Administration,
Office of Unemployment Insurance,
200 Constitution Avenue, N.W.,
Room S-4524,
Washington, D.C. 20210,
United States

Tel.: +(202) 693 3029
Fax: +(202) 693 3229

State workforce agencies are responsible for the administration of individual state unemployment programs.