The Social Security Act of 1935 (49 Stat. 620) created a federal unemployment compensation system. Shortly afterward, the federal government empowered states to create their own unemployment systems, which every state subsequently implemented. Along with meeting minimum federal standards, each state must determine who is eligible for benefits, how much unemployed workers will receive, and how long the benefits will last. Unemployment insurance benefits are paid entirely by taxes imposed on employers, except in three states (Alaska, New Jersey, and Pennsylvania), where the employees also contribute to the benefits.
Unemployment insurance pays benefits to qualified workers who are unemployed and looking for work. The benefit amount is calculated as a percentage of an individual's earnings over a previous period totaling fifty-two weeks. Most states pay a maximum of twenty-six weeks of benefits. People may be disqualified from receiving benefits for various reasons, such as voluntarily leaving work without good cause or being fired for misconduct. Another reason is the refusal of suitable work without good cause. "Good cause" must be connected with the job, rather than with the individual's personal life. Also, with few exceptions, workers are not eligible for benefits if their unemployment is caused by a labor dispute.
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