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What Is Unemployment Insurance

In the United States, unemployment insurance was established by the federal Social Security Act in 1935 and comes from two sources: federal programs and state statutes. Each state sets out its own unemployment insurance program, but has to abide by the minimum federal standards set out by the Secretary of Labor. Both federal and state laws come into account when determining which employees can receive compensation and how much, and then benefits are paid.

Do I Have to Pay for Unemployment Insurance?

That depends. If you’re an employer who has an incorporated business, you pay into your state’s Unemployment Trust Fund and can possibly collect insurance. And while regular employees (those who aren’t business owners, but work for someone else) don’t have to pay to collect unemployment insurance, you might have to pay in indirect ways. For example, you might have to pay for Internet access to collect information about your previous jobs, phone time to speak to someone from the unemployment office, and gas or bus tokens to visit an unemployment agency.

What Do I Need to Start Collecting Payments?

Right off the bat, make sure you have all your personal information on hand, including your Social Security number and driver’s license. Next, collect information about every job you’ve worked at in at least the last month, possibly having to go as far back as 24 months. What you’ll be asked for is: the names and contact information of your employers (phone, email, business address, Federal ID number from your W2 form/pay stub); rate of pay and total amount paid; amount of benefits, vacation/holiday pay, severance packages; and the dates you started and ended your employment. However, the type and amount of information required varies from state to state, so always check with your state’s unemployment agency first.

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