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5 Things You Didn’t Know About Unemployment Insurance

Researcher & Writer

February 18, 2016

1. You don’t pay into it.

There is a common misconception that employees pay into unemployment insurance through payroll taxes, but this is not the case. The burden of unemployment tax falls on employers. Only 3 states, and only under certain circumstances, collect any money from employees to cover unemployment insurance. This means the common “it’s my money anyway” excuse used for committing unemployment fraud is completely baseless.

2. It’s not based on need.

Anyone who loses their job through no fault of their own is eligible to receive unemployment benefits, regardless of total household income. This means that even if you have a large savings or your spouse makes enough money to support your household expenses, you are still entitled to unemployment benefits. Since most government programs are need based, many individuals who are entitled to unemployment benefits fail to claim them because they think they are ineligible.

3. It’s more than a check.

Part of your responsibility while receiving unemployment benefits is to actively seek work. Luckily the American Job Center near you is there to help. These centers provide no cost employment services for individuals receiving unemployment insurance benefits as well as those who don’t—all at no cost. Here you’ll find staff ready to help you write a résumé, practice interview techniques and tweak your cover letter. They can also connect you to job leads and training programs to get your career back on track.

4. It really functions like insurance.

Just as with car insurance, unemployment insurance is a sum of money that is paid into a reserve pot used to cover incidents when the money is needed. Taking the comparison a step further, employers who use unemployment insurance are also faced with higher tax deductions after use, just like you would if you were in an auto accident. This rule encourages employers to avoid layoffs.

5. Fudging your claim can result in jail time.

Unemployment fraud is taken very seriously. Most commonly, fraud occurs when a person claims they are not working, but in fact are. When you begin receiving benefits, you are required to submit weekly claims to maintain eligibility. Submitting false information or omitting pertinent information is a crime and you risk misdemeanor of felony charges being brought against you. Punishments range from owing the wrongful payment plus a penalty fee to jail time.

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