About Unemployment Insurance

Questions that we received from various people indicate that there is general misunderstanding of what Unemployment Benefits are all about. For the benefit of those of you who were never exposed to the subject we put a summary below. Please notice that Unemployment Insurance (UI) was put together to help workers who lost their job mitigate the financial effects of job loss.

There is no shame and there should be no stigma associated with claiming what is legally and rightfully yours. Even of you were not aware, UI was part of your overall compensation package since the first day of your employment.

Financing the Unemployment Insurance Program 

The money used to pay Oregon unemployment insurance benefits comes from Oregon employers’ state payroll taxes. The taxes collected are deposited in a trust fund used to pay unemployment insurance benefits to unemployed Oregon workers.

The money to administer the unemployment insurance program comes from a federal tax, created by the Federal Unemployment Tax Act (FUTA). The federal unemployment tax is assessed on all for-profit employers and is paid to the Internal Revenue Service.

Federal Unemployment Tax Act (FUTA)

In addition to Oregon’s unemployment tax, employers pay a federal unemployment tax (FUTA tax) based on payroll. The FUTA tax is collected by the Internal Revenue Service to fund the administrative costs of the employment service and unemployment insurance programs throughout the country

UNEMPLOYMENT INSURANCE BENEFITS

Unemployment Insurance benefits replace part of the income lost when a person becomes unemployed. This softens the impact job losses have on communities. Workers maintain purchasing power to support businesses in the area where they live. Qualifying A claim is based on a one-year period known as the base year. The base year is the first four of the last five calendar quarters completed at the time the initial claim is filed.

There are two ways to qualify: 

• First: claimants qualify if they have employment and wages of at least $1,000 in employment subject to unemployment insurance law AND total base year wages equal to at least one and one-half times the wages in the highest quarter of the base year. or
• Second: if an individual does not qualify the first way, a person may qualify for benefits if he or she has wages and worked at least 500 hours during the base year of employment subject to unemployment insurance law.

Benefit amounts are set by law as a percentage of the wages received during the base year. The weekly benefit amount is 1.25% of the total base year wages but with a fixed lower limit of 15% and an upper limit of 64% of the state average weekly wage in covered employment. A claim lasts for 52 weeks that make up the benefit year. This is the 12-month period beginning with the week they first file for benefits to set up a claim. Claimants may receive up to 26 weeks of benefits within the benefit year. Minimum claims may have fewer than 26 weeks available. They cannot file a new claim until after the 52 weeks. Extended benefits may be paid beyond the 26 weeks during periods of high unemployment.