Can You Collect Unemployment If You’re Fired?

By Kristin Kizer - Aug. 8, 2021

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Key Points:

  • You cannot collect unemployment benefits unless you are unemployed through no fault of your own

  • People who are laid off can almost always claim unemployment benefits

  • People who are fired for poor performance are usually eligble for unemployment benefits, so long as their was no willful misconduct

  • In some states, employees who are fired for misconduct may be eligible for unemployment benefits after a set period of time, as long as the misconduct wasn’t egregious

  • Every state has its own guidelines for unemployment benefits — some are far more generous to employees than others

One of the most asked questions and the most confusing topics is “Can a fired employee collect unemployment payments?” What’s most interesting about this answer is that it’s both yes and no. Another polarizing factor is the stance that many people take on the issue.

So, what is the answer and how do you determine if you qualify for unemployment benefits after you’ve been fired from your job.

How Does Unemployment Work?

The first step toward understanding this is to learn a bit more about unemployment and what it really is and what its goal is. You may hear the terms unemployment insurance and unemployment benefits used pretty interchangeably. That’s because they are the same thing.

Unemployment insurance is set up between each state and the federal government. That means that you may find some differences from state to state but each program is defined by the Federal Unemployment Tax Act.

Like all insurance policies, you have to pay a premium into this one. Your employer is responsible for paying unemployment insurance to the state you work in and the federal government. Three states require employees to contribute to this fund also.

Again, very similar to an insurance policy for, let’s say your car, you pay in your premiums and then, if something happens to your car, you get a payment. So, if your car slides on ice and hits a mailbox, you’ll get insurance coverage for the damage and it might cover the mailbox, too. If you lose your job, you’ll get coverage from your unemployment insurance – maybe.

This is where it can be tricky. Much like your car insurance, not everything is covered. If your car has a bad radiator, your insurance won’t cover that. And if you quit your job, you won’t get unemployment insurance (for the most part).

Typically, unemployment insurance is designed to pay a percent of your regular pay if you lose your job, but not if you quit, are self-employed, or you are fired for cause.

If you do qualify for unemployment, you’ll be paid for 26-weeks (a half of a year). At that time, if you have not found employment and you can prove you’ve been actively looking, you might be able to apply for and receive an extension.

Since 2020, the coronavirus has affected unemployment benefits by state and across the country. This can change the length of time you receive payments and the amount you’re eligible to receive. Since many businesses were shut down unexpectedly, unemployment rates rose dramatically during this time and an additional stimulus payment was added. Some states did a good job with supporting employees, others did not.

Reasons for Ineligibility for Unemployment Insurance

Some people mistakenly believe that you get unemployment benefits, or the payout from the insurance, no matter why they’re unemployed. On one hand, they are right that every employer is required to pay in for your insurance. But on the other hand, they’re totally wrong about everyone being eligible for a payout.

You can quickly see why this wouldn’t work for people who have quit their jobs. They could get hired one week and quit the next and then just sit on unemployment for 26 weeks until their check runs out and they’re required to get another job.

In most cases, quitting your job makes you ineligible for unemployment. There are few exceptions, like if you had good cause for quitting, you might still be able to get payments. Example scenarios include an unsafe work situation or a job where you were being harassed and can document that you reported it and they didn’t do anything to help you.

Getting fired from your job can make you ineligible, too. If you’re trying to get fired and doing all the wrong things, your employer has a right to fire you and you’re ineligible for unemployment insurance. But if you’re fired unjustly, you might be eligible.

Another eligibility requirement for unemployment is based on your state’s threshold for earned wages or time worked. This is called the base period.

In almost every state the base period is a year, which means you’ll have to have worked for a year, before losing your job, to collect unemployment benefits. Some states require you to have worked a certain amount of hours in the base period before qualifying. It’s best to check with your state unemployment office to see if you will qualify.

Rights of Fired Employees

If you’ve been fired from your job, you do have some rights. While most employees are considered “at will”, which means they can be fired at any time and for any reason – almost. Some terminations are considered illegal, in which case you may have a lawsuit and you may collection unemployment. These situations are:

  • An implied contract was violated

  • The firing violates public policy

  • The employee was discriminated against

  • Termination was in retaliation for an act protected by law

If you’ve been fired, and justly so, you may not qualify for unemployment insurance benefits, but you do deserve your last paycheck. Some states have laws on how quickly that check must be paid. Severance pay is not legally required unless it has been promised to you in writing or orally.

Many people who have been fired are concerned about their health insurance, especially when it’s funded by their employer. The Consolidated Omnibus Budget Reconciliation Act, or COBRA as it’s better known as, gives the employee and their insured family members the option to continue insurance for a predetermined period of time.

You might be able to receive unemployment if you were fired or downsized due to no fault on your part. If you did something, or didn’t do something, that caused you to be let go from your job, chances are that you won’t receive benefits.

Can an Employer Contest an Unemployment Claim?

You might be surprised when you file your unemployment claim and get a notice that your ex-employer is contesting your benefits. They can do this and many of them do.

One reason an employer would contest your claim is because they are financially penalized for having too many unemployment claims from their employees. Initially, employers are taxed at a set rate, but if they are generating more claims with their fired employees than average, they’ll have to pay a higher tax rate. On the other side, if they have fewer claims, their tax rate drops.

If you find out your employer is denying your eligibility and contesting your claim, then you’ll also notice that you can fight back. The ultimate determination will come down to your state agency. You will be given a chance to defend yourself if what the employer says contradicts what you first presented to the unemployment office.

Even if the agency decides you don’t qualify, you get another opportunity to appeal the denial. After that, some states let you proceed with a second appeal, while others do not.

What Does “Fired for Cause” Mean?

“Fired for cause” means that your employer can prove that they had a “reason” to terminate you from your job. There are many different reasons an employer can fire someone with cause but a few of them are listed below:

  • Violation of the company code of conduct

  • Failure to follow orders from superiors

  • Breach of contract

  • Not showing up for your job or being repeatedly late

  • Any acts of violence or threats

  • Falsifying records

  • Stealing

  • Harassing others

  • Failing alcohol and/or drug tests or working while under the influence

  • Violating company computer policies

Again, there are many other reasons, but those of some of the most common ones. Your employer cannot just claim you were fired with reason, they typically have to provide some sort of proof. They are not allowed to say that you stole money without any proof that you did. If they have drawer counts, witnesses, or maybe video of the alleged incident, then they can fire you for stealing.

When there is a termination for cause situation and the employer has documentation, then it is very unlikely that the employee will get unemployment compensation.

Collecting Unemployment After Being Fired

If you’ve been fired, there are a couple different directions you can go in. If you believe you were unjustly fired, you can file for unemployment and explain your situation. There will probably be a denial from your employer. Then, there will be a hearing by the state’s unemployment agency to see if you qualify for benefits. If the employer doesn’t have proof, you’ll get unemployment.

If you were fired for cause, you can try to file an unemployment claim. This will again, most likely, be contested by your employer. And, if you were guilty and they have proof, you won’t get unemployment benefits.

Finally, if you think you probably were justly fired, it’s simply time to move on and find a new job.

One thing to note here, as mentioned before, most employees are considered “at-will” employees. This means that they can quit their job at just about any time they want for any reason. Likewise, your employer can fire you at any time for any reason.

Remember, to receive unemployment benefits you need to be fired through no fault of your own. If you’re an at-will employee and your boss decides he just doesn’t like you anymore, he can fire you. And that’s clearly no fault of yours, which means you can collect unemployment.

On the other side of the coin, as an at-will employee, you repeatedly show up late and spend most of your day in the breakroom. Your boss can clearly note all of the times you clocked in late and make notes in your employee file about how much you’re in the breakroom. After speaking with you about it, you don’t change your behavior and your boss fires you. Here you would not be able to collect unemployment because you were at fault and it can be proved.

At-will status does not change the requirements of unemployment insurance benefits compensation or payouts.

Unemployment After Being Fired FAQ

  • Is it better to quit or be fired? It depends on your situation. If you have another job lined up or are being seriously mistreated at your current workplace, it’s certainly better to quit rather than be fired. Additionally, quitting for reasons like harassment, illegal company activity, or arbitrary change of duties or wages will usually not disqualify you from collecting unemployment benefits.

    Being fired carries a much greater stigma than quitting, but there are ways to speak diplomatically about being let go in an interview.

    The only upside to being fired is a situation where you’re being laid off, receiving a severance package, followed by a guaranteed half-year of unemployment insurance. Otherwise, the hassle and risk of receiving unemployment after being fired make the quitting option seem favorable in most scenarios.

  • What do I do if I get fired from my job? First and foremost, don’t panic or become hostile toward your colleagues. Having an attitude in these situations can only hurt and will never help. There’s a chance you can even come away with a good reference if you handle the departure well.

    As far as unemployment goes, consider whether the situations we outlined above apply to you. In general, if you’re being laid off or fired for poor performance, you’ll be eligible for unemployment insurance. There’s a fine line between poor performance and willful misconduct though, so tread carefully.

  • Does a company have to pay you if they fire you? A company must pay you all outstanding wages on your next scheduled payday or within 15 days of being fired, at a maximum. In California, an employer must immediately pay a fired employee all outstanding wages.

  • How do you bounce back after being fired? If you’re in a situation where you’re able to receive unemployment benefits, take advantage of this time to look for a career that will make you happy, pay as much or more than your last job, and match your skill set. Regardless of your situation, give yourself a week or so to mourn the loss and recharge your mental batteries.

    Then, reach out to your network and see what’s out there. The other professionals you know are often the best route to a new occupation, and there’s something to be said for momentum — the quicker you reach out to recent contacts who still have you fresh in their heads, the more likely you’ll come away from these conversations with a prospective job.

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Author

Kristin Kizer

Kristin Kizer is an award-winning writer, television and documentary producer, and content specialist who has worked on a wide variety of written, broadcast, and electronic publications. A former writer/producer for The Discovery Channel, she is now a freelance writer and delighted to be sharing her talents and time with the wonderful Zippia audience.

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