If an employer lays off employees, will the employees be eligible for unemployment insurance? Will the employer’s unemployment taxes go up?
Category: Human Resource Policies and Pandemic Planning Workplace Questions
Sub-Category: Layoff/Termination/Firing
Answer:
The Federal-State Unemployment Insurance (UI) program provides partial wage replacement for individuals who are unemployed due to a lack of suitable work. Unemployment compensation is provided to unemployed workers who meet certain eligibility requirements established by State law and consistent with broad federal law requirements. Requirements include:
- The worker must meet the State requirements for wages earned or time worked during an established (one year) period of time referred to as a "base period." (In most States, this is usually the first four out of the last five completed calendar quarters prior to the time that a claim is filed.)
- The reason for the separation must not be disqualifying under State law and the worker must meet other eligibility requirements of State law.
It is possible that your unemployment taxes will increase if you lay off workers who, as a result, receive unemployment compensation. Therefore, you should check with your state on specific eligibility requirements and the impact of layoffs on unemployment taxes.
We encourage you to proactively prepare a pandemic plan specific to your workplace and to consider options other than a lay off.
Note: As an overall matter, employers should be guided in their relationship with their employees not only by federal employment law, but by their own employee handbooks, manuals, and contracts (including bargaining agreements), and by any applicable state or local laws.
Not all of the employment laws referenced apply to all employers or all employees, particularly state and local government agencies. For information on whether a particular employer or employee is covered by a law, please use the links provided for more detailed information. This information is not intended for federal agencies or federal employees -- they should contact the U.S. Office of Personnel Management (OPM) for guidance.
Workplace Frequent Questions by Category:
Last Updated: 01/24/2008
