Can Your Employer Put You on Unemployment if You're on a Salary?
- Employers pay into the Federal Unemployment Tax Act, or FUTA, system to support those who are out of work. The Department of Labor, or DOL, establishes the rules for the collection unemployment benefits. You qualify for 26 weeks of unemployment benefits and may file for an extension for an additional 26 weeks if you fail to find employment. An employer cannot prevent you from from collecting unemployment benefits if you qualify under the law.
- Whether your pay is hourly or salary based plays no part in your eligibility for unemployment benefits. Rather, the length of employment is one of the criteria that determines eligibility. This is the base period, which is equivalent to four calendar quarters or one year. The quarter for which you first claim unemployment and the preceding quarter are not used to calculate the base period. Instead, it is the first four quarters after the previously-completed five quarters of employment.
- The DOL has an established formula to determine the Weekly Benefit Rate at which it pays you. To calculate the benefit rate, the DOL takes the two highest quarters of your gross earnings and divides this amount by 26. For instance, if you earned $12,000 in your two highest quarters, your weekly benefit rate is $461.54. To receive this amount, you must have earned 40 times this amount, in this case $18,461.54, over the base period.
- Besides your length of employment and monetary eligibility, you must meet other requirements. You must be partially or totally unemployed when making a claim for benefits. In addition, you must be actively seeking employment and be mentally and physically available to work. Participation in re-employment services is also mandatory. In some cases, your employer may dispute your claim for unemployment benefits in which case the DOL allows for a hearing and appeal process.
