How Long Does an Employer Have to Pay Unemployment?

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Unemployment insurance helps with basics, such as food and shelter.
Unemployment insurance helps with basics, such as food and shelter. (Image: street hobo image by Alexey Klementiev from Fotolia.com)

Employers must pay unemployment insurance for as long as they have employees, as long as these employees work a minimum amount. This varies from state to state, but it is usually less than $1,000 in a calendar year, as of 2011. An employer's schedule of unemployment insurance payments is linked to whether or not he has employees at the moment, rather than whether past employees are collecting against his account.

State Unemployment Insurance

State unemployment insurance is a payroll tax, or a tax that employers owe based on how much they pay their employees. An employer's unemployment tax rate will be based on his track record as an employer, or how many unemployed workers are collecting against his account. New employers pay an elevated rate because they have no track record, but if they retain employees over time and no former employees make unemployment claims against their accounts, their unemployment tax rates will go down.

Federal Unemployment Tax

Federal unemployment tax is a federal tax obligation that goes into a general fund, which the federal government directs back to the states to help them pay for administrative costs associated with unemployment benefits. Federal unemployment insurance rates do not change as a result of claims made against a particular account by former employees. However, employers may apply state unemployment payments as credits toward federal unemployment obligations, and wages or salaries in excess of $7,000 per employee are exempt from federal unemployment tax.

Eligibility for Unemployment

Criteria for eligibility for unemployment benefits varies from state to state, although all states must comply with federal guidelines for unemployment criteria. In order to be eligible for unemployment benefits, an employee must have worked a base period for a particular employer during the previous year, and he must be out of work due to no fault of his own. An employee is likely eligible for unemployment benefits if his former employer did not have enough work to support him. He will not be eligible if he lost his job because he preferred to sleep late.

Duration of Benefits

Eligible unemployed workers can usually collect benefits for 26 weeks, although during periods of high unemployment, the government may extend unemployment benefits, as it did in 2010, when it added an additional 13 weeks to the benefit period. Some states added an additional seven weeks, as well. The amount of time that an unemployed worker can collect benefits depends on his current need and past work history, rather than on whether his former employer is still paying into the unemployment insurance fund.

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