Unemployment Question

[lovinmaryland]

So $ is taken out each paycheck for unemployment right? What happens to that money if you never have to go on unemployment?

 

[Tilted]

So $ is taken out each paycheck for unemployment right? What happens to that money if you never have to go on unemployment?

It's essentially an insurance program (which certain employers are required to pay into on behalf of employees). So, if you don't experience that which you are insured against, you don't collect benefits.

With all of the unemployment in recent years, and the federal government's desire to have the long-term unemployed continue to receive benefits beyond what was originally in the 'agreement', it has had to subsidize the funding pool.

 

[mus]

So $ is taken out each paycheck for unemployment right? What happens to that money if you never have to go on unemployment?

You've helped out your fellow Americans. And you should consider yourself lucky.

 

[PrepH4U]

So $ is taken out each paycheck for unemployment right? What happens to that money if you never have to go on unemployment?

Do you really have a deduction for unemployment? I thought it was the employers who were responsible for the fed & state unemployment. :shrug:

 

[Gilligan]

Do you really have a deduction for unemployment? I thought it was the employers who were responsible for the fed & state unemployment. :shrug:

You are correct...employers pay it directly (state and FUTA); nothing is deducted from an employee's pay.

 

[lovinmaryland]

Do you really have a deduction for unemployment? I thought it was the employers who were responsible for the fed & state unemployment. :shrug:

I was told that you paid into unemployment that is why each persons amounts & week period are different etc...

 

[Gilligan]

I was told that you paid into unemployment that is why each persons amounts & week period are different etc...

Whoever told you that is incorrect.

From MD's DLLR page:

Unlike some other government assistance programs, unemployment insurance is just that - insurance. No deduction is made or has been taken from a worker's paycheck to pay unemployment insurance benefits. The entire amount is paid for by the employers covered by the Maryland Unemployment Insurance Law.

The Fed FUTA component..

The Federal Unemployment Tax Act (or FUTA, 26 U.S.C. ch. 23[dead link]) is a United States federal law that imposes a federal employer tax used to fund state workforce agencies. Employers report this tax by filing an annual Form 940 with the Internal Revenue Service. In some cases, the employer is required to pay the tax in installments during the tax year.

FUTA covers the costs of administering the unemployment insurance (UI) and job service programs in all states. In addition, FUTA pays one-half of the cost of extended unemployment benefits (during periods of high unemployment) and provides for a fund from which states may borrow, if necessary, to pay benefits.

 

[Tilted]

I was told that you paid into unemployment that is why each persons amounts & week period are different etc...

Employers pay into it on behalf of employees (in a generalized way). The amount of the insurance benefit, should it need to be collected, is based to some extent on the value of the loss (i.e. the former employee's pay).

 

[Gilligan]

Yep, and if you have someone make a claim they drown the employer even more. Crazy how careful one has to be hiring these days- could cost them a fortune if it is the wrong person.

Our 'experience based' rate provided to us by DLLR goes up..and up..and up. Yet in almost 12 years, we've had two former employees ever claim unemployment and those many years back.

 

[mAlice]

Yep, and if you have someone make a claim they drown the employer even more. Crazy how careful one has to be hiring these days- could cost them a fortune if it is the wrong person.

I claimed unemployment some years ago. The employer had to prove there was reason to fire me, which could not be done. If I'd had counseling forms or something in my personnel record to support them firing me, I'm sure I wouldn't have been able to collect.

We ultimately learned that it was a clear case of nepotism.

 

[lovinmaryland]

Yep, and if you have someone make a claim they drown the employer even more. Crazy how careful one has to be hiring these days- could cost them a fortune if it is the wrong person.

Hubby's company closed so he is on it right now and was a little down. I told him dont feel bad you paid into that so you are just getting your $ back til you find something else....opppps Oh well what he doesnt know wont hurt him

 

[Gilligan]

Hubby's company closed so he is on it right now and was a little down. I told him dont feel bad you paid into that so you are just getting your $ back til you find something else....opppps Oh well what he doesnt know wont hurt him

You can sorta say that he paid for it. His contribution to the company's income that was used to pay his salary, whatever the company portion of his benefits, and half of his social security is the same pot of money that was used to pay for his unemployment insurance. "Just another" employer paid benefit, is all, albeit one that is not optional for the employer..LOL

 

[jetmonkey]

You pay for it in the form of lower wages.

 

[SoMDGirl42]

Hubby's company closed so he is on it right now and was a little down. I told him dont feel bad you paid into that so you are just getting your $ back til you find something else....opppps Oh well what he doesnt know wont hurt him

I thought he already got a new job? When I got laid off in January, I received one unemployment check before I got a new job and they cut me off.

 

[Sweet 16]

So $ is taken out each paycheck for unemployment right? What happens to that money if you never have to go on unemployment?

Some lazy slob will suck it up sitting on their butt for 99 weeks!

Seriously, it isn't deducted from your paycheck specifically for you to use should you become unemployed. It is a tax imposed on your employer which goes into a "pool" to be paid out to those claiming unemployment benefits. Now, re-read my first sentence.

 

[MMDad]

You pay for it in the form of lower wages.