Unemployment Insurance

Basics
Since its inception in 1935, the unemployment insurance (UI) program in the United States has operated as the primary safety net for those who involuntarily lose their jobs. Although the UI system's broad guidelines were established by federal law, UI essentially operates as a state-level program. States tax employers to finance regular UI benefits for unemployed workers, generally up to 26 weeks. Each state determines its own rules governing matters such as benefit levels, eligibility, and revenue, resulting in substantial variations among state programs. Although the states set most of the basic UI rules, key decisions are made at the federal level as well, such as funding disaster unemployment assistance and extended benefits for the long-term unemployed. States UI trust funds may run dry when unemployment remains high for sustained periods, forcing states to borrow from the federal UI trust fund and repay the loans later. At the moment, 30 states have exhausted their UI trust funds and are borrowing from the federal government.

Current
A few states have moved to pare back eligibility for state benefits.

In March 2011, Michigan cut state coverage to 20 weeks. The move came as part of a compromise to extend federally funded Extended Benefits.

In April 2011, Missouri also reduced state coverage to 20 weeks. As a result, unemployed Missourians filing new claims lose 6 weeks of coverage under the state program and lose up to 17 additional weeks of federal unemployment benefits available under current law.

In May 2011, the Florida legislature passed a draconian reform of its UI system, becoming the only state to vary the maximum allowable weeks of state unemployment benefits based upon the state’s unemployment rate. The Bill pares the maximum weeks from 26-to—and allows that to shrink to as little as 12 weeks if the state’s unemployment rate falls below 5 percent.

FAQ
Learn More
The premier national work on state unemployment compensation is done at the National Employment Law Project (NELP).

Video: Long Term Unemployment

Recent Research Highlights

Added December 14, 2011 Source: Policy Matters Ohio
Issue: Unemployment Insurance
State: Ohio

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