• Unemployment payments provide crucial income for workers unexpectedly laid off from their jobs. Laws for unemployment compensation establish the infrastructure for each state's program and how these programs are funded. These laws also determine the eligibility requirements and define employers' rights and responsibilities when it comes to jobless benefits claims.
  
  

Social Security

• The Social Security Act of 1935 established the framework for the federal-state unemployment compensation program. This law granted powers to the U.S. Department of Labor to oversee the program and create regulations for its effective management. Each state has its own unemployment department that reports directly to the Department of Labor to determine the national percentage of employed and unemployed workers. The U.S. Virgin Islands, Puerto Rico and the District of Columbia also maintain departments.
  
  

Tax Act

• To fund the state unemployment compensation systems, the federal government imposes a tax through the Federal Unemployment Tax Act. This law requires employees and employers to pay into the federal and state funds based on a percentage of gross earnings.
  
  

Eligibility

• Laws governing eligibility require that a person must have been employed recently for a specific amount of time, according to the Policy Almanac website. He also must have earned a minimum amount of wages during that time period and must have been dismissed from work without fault. Dismissed without fault can involve being laid off as a result of lack of available work or being fired without just cause. The law in each state allows employers to contest claims for unemployment compensation if the employer can show the employee was dismissed for a legitimate reason. In order to receive jobless benefits, the person must be able and ready to work.