By Mary Campbell
Losing your job is already one of the most devastating things that can happen to you. And, unfortunately, many people who become unemployed face significant financial difficulties. For example, you may have trouble paying your rent/mortgage, making car payments, repaying student loans, and buying groceries and other necessities. Luckily, most American workers who lose their job — through no fault of their own — are eligible to receive unemployment compensation to help them get by for a while.
What is Unemployment Insurance?
In the United States, unemployment insurance is a joint federal-state program that offers cash payments to unemployed workers. Typically, the federal government covers the costs of paying benefits to unemployed workers. State governments cover the administrative costs of running their respective unemployment insurance program. Therefore, if you lose your job, you will apply for benefits through your state’s unemployment office. If your claim is approved, your payments would be funded by the federal government. The federal government funds unemployment benefits from a payroll tax that employers pay on behalf of their employees.
To qualify for unemployment compensation, you must have been an employee for at least four out of the last five quarterly periods. Furthermore, you must have lost your job through no fault of your own. That usually means a layoff resulting from less business activity. Unfortunately, millions of Americans are not eligible for unemployment compensation should they lose their primary income source. For example, if you own a business that goes bankrupt or a freelancer who loses your gigs — you can’t file an unemployment claim for compensation. Many states impose additional requirements like meeting a certain income threshold. You can research your state’s requirements for unemployment benefits online.
Partial Unemployment Eligibility
As of January 18, 2021, New York State has implemented a new rule that redefines how part-time work impacts unemployment benefits. This change makes New York’s partial unemployment system fairer and more equitable for New Yorkers who have the opportunity to work part-time while collecting regular Unemployment Insurance (UI) and Pandemic Unemployment Assistance (PUA) benefits.
NYS DOL’s new partial unemployment system uses an “hours-based” approach. Under the new rules, you can work up to 7 days per week without losing full unemployment benefits for that week, if you work 30 hours or fewer and earn $504 or less in gross pay excluding earnings from self-employment. With this change, your benefits will not be reduced for each day you engage in part-time work. Instead, benefits will be reduced in increments based on your total hours of work for the week.
How to File a Partial Claim
If you lost work and you are working part-time 30 hours or fewer a week and making $504 or less per week, the following guidelines apply when reporting your part-time work (round up to the nearest hour):
- 4 or fewer hours of work = 0 days worked: No reduction in the weekly benefit rate
- 5 – 10 hours of work = 1 day worked: 75% of weekly benefit rate
- 11 – 20 hours of work = 2 days worked: 50% of weekly benefit rate
- 21 – 30 hours of work = 3 days worked: 25% of weekly benefit rate
- 31+ hours of work = 4 days worked: 0% of weekly benefit rate
If you worked more than 10 hours in one day, you should only report the first 10 hours from that day in your weekly total. The hours cap does not change the $504 gross weekly payments rule – you must still report your total earnings for the week. If you earn more than $504 in weekly gross pay (the amount of money you earned before taxes and deductions are taken out), you will not be eligible for UI or PUA benefits regardless of the number of hours you worked.
Federal Program Extensions
The federal government has extended the federal unemployment benefit programs available through the CARES Act for an additional 11 weeks. Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) will be available through March 14, 2021, with qualified claimants’ benefits fully phasing out by April 11, 2021. Federal Pandemic Unemployment Compensation (FPUC) benefits will resume with $300 weekly payments until March 14, 2021.
To receive these extended federal benefits, continue to certify weekly while unemployed. To allow your fellow New Yorkers to reach NYS DOL representatives about regular matters, please do not call the DOL to inquire about the federal program extensions at this time.
By the end of January, you will be able to get your Statement for Recipients of Certain Government Payments (1099-G). This is a tax form. It provides the total amount of money you were paid in benefits from NYSDOL for a specific calendar year, as well as any adjustments or tax withholding made to your benefits. Benefits paid to you are considered taxable income. You must include this form with your tax filing for the applicable calendar year.
Applying for Unemployment Benefits
Every state has its application process for applying for unemployment compensation. You can still apply in person at your local unemployment office in most states. However, many states encourage applicants to apply online because it saves time and paperwork. You will have to search online to find out how to apply for unemployment in your state. However, you should apply for unemployment compensation as soon as you can because it can take at least a few weeks for you to start receiving benefits. First, your state will have to review your application. Then, you will be scheduled for a hearing to attend. Your evidence will be presented at the hearing to help determine whether your unemployment claim should be approved or denied. For example, your former employer could attend to lobby against you if they claim you were fired with cause. If your application is approved, you will likely start receiving cash payments in a couple of weeks.
In short, unemployment insurance is intended to help eligible workers who lose their jobs. Unfortunately, since the program only covers W-2 employees, millions of Americans are left out. You will have to check with your state’s unemployment insurance program to determine whether you can apply. If you qualify, you should begin the application process immediately after losing your job so you can start receiving compensation sooner.
Resource: NYS Department of Labor