Letting an employee go doesn’t always mean your relationship is over. The Social Security Act enables them to file for unemployment insurance to help them make ends meet between jobs. Fortunately, you’re paying into federal and state taxes to cover these costs; however, this isn’t where your responsibility ends. As soon as you receive notice the former employee has filed, these are steps you need to immediately take.
More than 80 years ago, Franklin Delano Roosevelt established the Social Security Act to provide for the general welfare of workers. Most commonly, you see this related to the Social Security benefits people receive after retiring, but it covers other workers’ benefits, such as industrial accident victims, assistance for mothers and children, and unemployment insurance.
When an employee is let go, they have several options to receive income during their period of unemployment. One option is unemployment insurance, where a former employee of a company is paid a percentage of their wages for a period of time between jobs. As an employer, here’s what you need to know about unemployment insurance and how it affects you.