Hearing that your employer is going out of business can be a shocker, especially if you aren't financially prepared for the pending closure. The good news is that you don't have to stress out over where your next dime is coming from. As long as your employer pays state unemployment insurance taxes, you can apply for unemployment benefits to help relieve some of your financial hardship.
Unemployment Compensation Laws
By law, if you're unemployed due to no fault of your own, you're entitled to file for unemployment benefits, and you certainly have no control if your employer goes out of business. As such, you can file for unemployment when it happens. Whether or not an employer is required to pay unemployment insurance taxes depends upon how many employees she has and how much she pays in wages. For instance, Massachusetts employers, who have at least one employee for 13 weeks out of the year or pays $1,500 in wages for at least one quarter of the year, are required to have unemployment insurance. To determine the laws affecting you, contact your state's unemployment insurance department.
Filing for Benefits
Don't quit your job when the employer tells you she is going out of business. If you quit, you'll likely forfeit your unemployment benefits. Wait until there are padlocks on the doors or you're no longer permitted to work. If possible, get a statement in writing from your employer indicating she is going out of business. As soon as you are relieved of your job duties, contact the local unemployment office to apply for benefits. Many agencies allow you to quickly apply for benefits online. The application process is simple: You're asked questions about your employment history, past wages and the reason you're unemployed. For the reason, indicate that your employer went out of business.
Start Submitting Claims
As soon as you complete an application for benefits, start submitting your weekly or biweekly claims. Don't delay doing this or you risk losing money you're due to receive. To submit a claim, you generally complete a questionnaire indicating you're still unemployed and actively seeking work. This questionnaire may be completed over the phone, online or by mail submission depending on your location.
Fact-Finding Interview
To determine your eligibility for benefits, an unemployment commission representative will contact you to conduct a fact-finding interview. During this interview, the representative will ask why you're unemployed. Let her know your employer went out business. If you were able to get a written statement from your employer, let the interviewer know. The interviewer will attempt to reach your former employer to verify your statements. If the interviewer is unable to reach the employer, she will likely accept your story regarding what happened and approve your request for benefits.
