What is Unemployment Claim

An unemployment claim is a request made by an individual to the state government to receive temporary payments after having been laid off from a job. The United States Department of Labor keeps track of the number of weekly unemployment claims. It provides both seasonally adjusted and seasonally unadjusted claims numbers and also lists which states had an increase or decrease of 1,000 or more claims. This data is reported in the media as an indication of national and state economic health. An unemployment claim is also known as an "unemployment insurance claim" or an "unemployment compensation claim."

BREAKING DOWN Unemployment Claim

Unemployment claims are paid from state funds that are collected from employers in the form of an unemployment insurance tax. In order to encourage workers to get another job, unemployment benefits are payable for a limited number of weeks and are designed to pay less than a worker would make at a job. To file an unemployment claim, a worker must meet certain criteria. For example, workers receiving unemployment benefits must be actively seeking employment (and be able to prove it) and they must have been laid off rather than having quit or been fired.

The initial date of an unemployment claim determines the benefit year during which a claimant may file weekly claims...as well as the base period of the claim. The base period determines the wages that will be used to compute the claimant's weekly and maximum benefit amounts and which employers will have potential chargeback or reimbursement liability for any benefits paid to the claimant. Only base period employers are part of an unemployment claim. Non-base period employers have no such liability.

Unemployment Claims and Dates

When a claimant files an unemployment claims is very important. For instance, consider an employer that hires an employee in March and lets the them go after 30 days. If the claimant files an initial before April 1, the base period would not include the first quarter of that year (the quarter in progress), nor the fourth quarter of the preceding year (the lag quarter). It actually consists of the fourth quarter of the year before the year preceding the current year, and the first three quarters of the year preceding the current year. However, since the employer did not report wages during that base period, it will have no financial involvement in the claim. The same would apply if the claimant waited until April, May or June to file the initial claim – in that case, the base period would omit the second quarter of the current year, the first quarter of the current year, and consist of the four quarters of the preceding year. If the ex-employee files an initial claim after June 30 of the current year, then the employer could be a base period employer, but its chargeback liability would be limited due to having paid only 30 days' worth of wages.