Unemployment Benefits: What If You're Fired?

Some reasons for termination might make you ineligible for unemployment benefits.

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To collect unemployment benefits, you must be out of work through no fault of your own. Workers who are laid off for economic reasons -- due to a plant closing, a reduction-in-force (RIF), or because of lack of work, for example -- are eligible for unemployment benefits. But employees who are fired are not always eligible for unemployment, at least not right away. It depends on the reasons why the employee was fired. (For information on your eligibility for unemployment compensation if you've quit your job, see Nolo's article Unemployment Benefits: What If You Quit?)

State law determines whether a fired employee can collect unemployment. Generally speaking, an employee who is fired for serious misconduct is ineligible for benefits, either entirely or for a certain period of time (often called a "disqualification period"). But the definition of misconduct varies from state to state.

In many states, an employee's misconduct has to be pretty bad to render the employee ineligible for unemployment benefits. An employee who is fired for being a poor fit for the job, lacking the necessary skills for the position, or failing to perform up to expected standards will likely be able to collect unemployment. But an employee who acts intentionally or recklessly against the employer's interests will likely be ineligible for unemployment benefits. Other states take a harder line, finding that employees who are fired for violating a workplace policy or rule won't be eligible for unemployment benefits, at least for a period of time.

Here are some of the types of misconduct that might render an employee ineligible to collect unemployment benefits:

  • Failing a drug or alcohol test. In many states, an employee who is fired for failing a drug or alcohol test will not be able to collect unemployment benefits. Refusing to submit to testing is also a disqualifying event in some states.
  • Theft. An employee who is fired for stealing from the company or from coworkers will most likely be ineligible to receive unemployment benefits.
  • Committing a crime. An employee who commits a crime connected with the job -- such as assaulting a coworker, driving under the influence while on company business, or destroying valuable company property -- will almost certainly be disqualified from receiving unemployment benefits.
  • Violating safety rules. An employee who makes a careless mistake may still be eligible to receive unemployment benefits, but an employee who willfully or intentionally disregards important safety rules will probably be disqualified from collecting benefits.

Even if you are disqualified from receiving unemployment benefits because of why you were fired, that disqualification may not last forever. In some states, being fired for misconduct renders an employee ineligible for unemployment benefits, period. In those states, until the employee gets another job, works there long enough to meet the state's earnings and/or work tenure requirements, and then becomes unemployed again, that employee will not be able to collect unemployment benefits. But in other states, an employee who has been fired for misconduct is ineligible for unemployment benefits only for a set period of time, particularly if the misconduct is less egregious. In other words, a penalty is imposed on the employee, but he or she may become eligible for unemployment benefits once the disqualification period ends.

To find out more about your state's laws on eligibility for unemployment benefits, contact your state unemployment insurance agency. You can find links and contact information for every state's unemployment agency at www.servicelocator.org/OWSLinks.asp, the Career One Stop site sponsored by the federal Department of Labor's Employment and Training Administration.

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