What is Covered by Employment Insurance and How to Apply

For employees who lose their jobs due to circumstances beyond their control, unemployment insurance, or UI, provides a lump-sum payment. Employer payments, which differ by state, pay for it.

To be eligible for benefits, you usually have to have worked a certain number of hours in "insurable employment." However, there are exclusions if you are forced to quit due to unsafe working circumstances or other issues.

EI: What Is It?

A government program called Employment Insurance offers a financial safety net to those who have lost their jobs due to circumstances beyond their control. Employer contributions and employee premiums—which are normally taken out of paychecks—fund it.

The amount you receive is determined by the local unemployment rate as well as your prior wage. Up to a certain amount, the system often replaces 30–50% of your previous weekly revenue.

The reason you are no longer working (such as a layoff or reduction in hours) and whether you have attempted to find employment are other factors that determine your eligibility for assistance. Generally speaking, self-employed individuals, gig economy workers, and students are not eligible for UI benefits.

When you apply for UI, if you haven't previously, set up direct deposit. This guarantees a prompt deposit of your payments into your bank account. The online application may be finished in about an hour, and you can use your temporary password to access it later.

Qualifications

Each state determines the base period during which a worker's earnings are used to calculate unemployment insurance payments. The majority of states also establish a cap on benefits. Benefits are often given out as weekly checks and are subject to taxation.

The original base period was intended to account for the fact that state officials were not always notified of workers' pay at the time of UI's establishment. But this requirement to look back is no longer relevant in the contemporary economy. Rather, states must implement and uphold stringent federal guidelines for financial eligibility that are connected to the labor market.

States should increase the use of the Extended Base Period, which enables workers who do not qualify under their usual base period to count prior salaries and employment history, in addition to establishing minimum monetary qualifying standards. These amendments will facilitate working families' access to UI benefits when they're needed, including those who take prolonged leaves of absence from their jobs to care for family members or to serve time in jail.

Advantages

Some jurisdictions provide extra benefits, such as training for a new job and financial assistance for relocating to an area with more jobs, in addition to a weekly benefit payment. The additional compensation you receive depends on the cause of your layoff and the unemployment rate in your state.

To be eligible for UI, you typically need to have worked for at least one quarter of the previous year. To be eligible for weekly benefits, you might need to work between 420 and 700 hours at an insurable job, depending on the unemployment rate in your area.

The primary goal of UI benefits is to lessen hardship for unemployed workers and their families. But they are also crucial in promoting economic activity and employment during recessions and the early stages of recoveries. Self-employed individuals and those who resign from their positions willingly or for personal reasons are not eligible for UI. However, some jurisdictions allow recipients of unemployment benefits to quit due to unbearable working conditions.

How to utilize

To be eligible for EI, you have to fulfill a few requirements. During a 52-week period known as your base period, you had to have made enough money (gross pay) from work that qualified you for insurance. This does not include self-employment income or severance compensation, but it does include commissions, bonuses, overtime pay, and vacation money.

Depending on your region and unemployment rate, there are minimum hours that you must work in order to be eligible for insurance. It may also differ based on how many hours you worked before the start of your claim and whether you previously breached any rules in order to receive benefits.

If you are eligible, you can apply in person at your nearest Service Canada office or online. You need to submit the required paperwork. You might have to give an explanation for your resignation, such as that you were let go or had your hours cut. Every application received will be considered individually. If you would like to receive your payments electronically, you can enroll in direct deposit.