Wonky Word Wednesdays: Unemployment Insurance

Yesterday, we released a report titled Making Unemployment Insurance Work for Montana Workers. In the report we highlighted the fact that women, American Indians, and low-wage workers receive this important safety net at a far lower rate than they should. You can read the full report here.

When I started wonky words, I wanted to help explain in more detail some of the acronyms many use, but few can define. I think Unemployment Insurance (UI) fits that bill. Most of us know generally what it is – insurance for when you are unemployed. But do you know how it works? Do you know how it is calculated? Do you know who qualifies?

Who pays?

The UI program is financed through employer-paid state and federal taxes on employee payroll. In general, the state provides UI benefits to people, and the federal government pays the administrative costs. In times of higher unemployment, the federal government provides extended unemployment benefits. Rate calculations for employers are explained here.

Who qualifies?

Not all Montana’s unemployed workers receive UI. In order to qualify for unemployment insurance benefits, an individual must:

  • Have lost a job through no fault of her own,
  • Be able to work, available for work and actively seeking work, and
  • Have earned at least a certain amount of money in the last year to a year and a half prior to becoming unemployed.

Montana’s UI program covers workers who: 1) were laid off or had hours reduced due to a lack of work, 2) left for a work-related reason, 3) left due to an on-the-job injury, 4) were fired for a reason other than misconduct, 5) left job because of a domestic or sexual violence or stalking situation, 6) left due to a spouse’s military assignment, or 7) were laid off at the end of a temporary job.

What do they receive?

Once qualified, an individual receives a weekly benefit amount (WBA), which is approximately one-half of what the employee earned. The minimum WBA in Montana is $134, and the maximum is $471. This rate lags behind neighboring states like Wyoming or North Dakota and is well below the national average. However, most states offer only 26 weeks of UI, and Montana allows up to 28 weeks.

What to know more?

We have a full paper detailing the nitty gritty of UI if you are interested.

Do you know someone who may qualify? Filing can be done online at the Department of Labor’s website.

UI helps to protect one of Montana’s greatest assets, our workers, by maintaining the stability of families and the economy during periods of unemployment. We will continue to look for ways that we can improve this important program. Next week we begin to tackle property taxes. Stay tuned.

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