3 Myths of Unemployment Insurance

28 Feb

unemployment-numbersMost all of us at one point have received unemployment insurance or know someone close that has received unemployment benefits.  These benefits serve a great purpose as a temporary measure to help individuals and families bridge the gap between jobs.  However, there are a lot of misconceptions about unemployment compensation – what it is, where it comes from, and so forth.  But first, let’s see how this benefit came into being.

The idea of unemployment insurance in the United States originated in Wisconsin in 1932 and quickly expanded to 50 state unemployment insurance programs plus one each in the District of Columbia, Puerto Rico and the Virgin Islands. Through the Social Security Act of 1935, the federal government effectively encouraged the individual states to adopt unemployment insurance plans.  So, as workers lose their jobs or are given layoff status for a period of time, then these funds are available to assist them with living expenses while they search for new employment.  It is classified as a social welfare benefit.

Unfortunately, through my experiences in working with workforce development I have seen a significant increase of individuals who abuse the system so they can receive unemployment compensation while they basically stay at home and watch television.  Whereas, there are many hardworking individuals who have utilized the benefits properly to help them quickly get back on their feet and return to the ranks of the working world.  Here are some of the major misconceptions or myths related to unemployment benefits:

  • It’s My Money – No, it’s not.  Most states have a law requiring employers to pay into an unemployment insurance fund based on the size of the company they operate and the number of workers employed.  These funds are mainly assessed by taxing the employer – not the worker.
  • I am Entitled – No, you’re not.  Just because you are unemployed does not entitle you to unemployment benefits.  Normally, these benefits are reserved for qualified workers who lose their jobs due to no fault of their own – meaning they were laid off or downsized due to other reasons.  If you are terminated for just cause or you decide to quit your job, more than likely you will not be qualified to receive unemployment benefits because your employment ended based on your own actions and not some other factor.
  • I Can Stay Home and Get a Check – No, you can’t.  Most states are cracking down on those who abuse the system by reporting false information related to their job search and/or work status.  There are specific deadlines and criteria to receiving unemployment insurance benefits including the filing of an application, notifying the state on a regular basis that you are looking for work and the possibility of paying back benefits if it’s discovered that you’re working ‘under the table’ or are reporting fraudulent information.

Hopefully, you will never need to utilize these benefits but it’s good to know there is help available in the event you ever find yourself unemployed and in need of financial assistance.  So, let’s educate and inform others about the true purpose of this unemployment system and move forward in getting people re-employed as quickly as possible.  What are your thoughts about unemployment insurance benefits?  Let me know by leaving a comment…and take time to follow me on twitter at @craigholloman.


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