Overview
The federal-state unemployment compensation (UC) program, created by the Social Security Act of 1935 (SSA),
offers the first economic line of defense against the effects of unemployment. As temporary, partial wage
replacement to the unemployed, UC is of vital importance in maintaining purchasing power and in stabilizing
the economy.
The UC program is a federal-state partnership based upon Federal law, but administered by state employees
under state law.
Federal law establishes certain requirements for the program. The SSA and the Federal Unemployment Tax
Act (FUTA) set forth broad coverage provisions, some benefit provisions, the Federal tax base and rate, and
administrative requirements. One of the major functions of the Federal government is to ensure conformity
and substantial compliance of state law, regulations, rules, and operations with Federal law.
Each state designs its own UC program within the framework of the Federal requirements. The state statutes
set forth the benefit structure (e.g., eligibility/disqualification provisions, benefit amount) and the state
tax structure (e.g., state tax base and rate).
This webpage provides some basic information about the requirements of Federal UC law.
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