It is a sad fact that companies go bankrupt all of the time in the United States, and that makes workers wonder about their unemployment benefits. When a company goes bankrupt, the sudden financial jolt to employees can be strong. To help tide them over until they can get new jobs, the employees look to collect unemployment. But is collecting unemployment possible when a company goes bankrupt?
Unemployment Insurance
In the United States, the unemployment insurance system is run by both the federal and state governments. The federal government supplies a portion of the funds, and the states collect insurance from employers to provide the other portion. Unemployment insurance is a payroll tax that companies must pay for each employee during each employment period. Some states have also created an unemployment insurance pool that employers pay a little into each month to cover payouts to employees who worked for companies that neglected to make their unemployment insurance payments.
Can I Collect Unemployment From A Company That Went Bankrupt?
As long as your employer paid their unemployment insurance, then you will be able to collect unemployment after the company goes bankrupt. Unemployment insurance is set up to be payable to any employee who was released from their job under qualifying circumstances, and a company going bankrupt is a qualifying circumstance.
What If The Company Did Not Pay Unemployment Insurance?
When a large group of employees goes to collect unemployment from a company that has gone bankrupt, it will be revealed if the company did not pay its unemployment insurance payments. If this happens, then there are programs in place that can help employees to collect some kind of compensation on a temporary basis. As was mentioned, some states have funds in place for just such situations and the federal government also has programs that may be able to help employees of bankrupt companies that did not pay their unemployment insurance.
Have You Been Collecting Unemployment Insurance?
If you were laid off by a company and were already collecting unemployment insurance when the company went bankrupt, then you should still be able to collect your funds. The only reason your unemployment benefits would stop, aside from fraud on the part of your employer, is if you have reached the end of your benefits term.
Loyal employees of companies that go bankrupt are eligible to collect unemployment. As long as the company was paying its unemployment payments before it went bankrupt, each employee should be able to collect benefits while they look for new jobs.
Jim Treebold is a North Carolina based writer. He lives by the mantra of “Learn 1 new thing each day”! Jim loves to write, read, pedal around on his electric bike and dream of big things. Drop him a line if you like his writing, he loves hearing from his readers!