The Illinois Unemployment Insurance Act was enacted to encourage employers to provide stable employment and to accumulate funds systematically allowing wage replacement benefits for those individuals who become unemployed through no fault of their own. More information about the act can be found online at:
Unemployed individuals who meet specific requirements are eligible to receive benefits under the act. The amount of benefits for which an unemployed individual is eligible varies, depending on the employee’s wages prior to being unemployed (wages includes all payments for services, including bonuses and commissions). Benefits are paid out of an Unemployment Compensation Trust Fund, which is funded by contributions from covered employers. Whenever an individual receives benefits, the former employer’s account will be debited. In addition, the employer’s future unemployment taxes will increase, and the claim may affect the employer’s future tax for up to three years.
The act provides procedures for determining whether individuals are eligible for benefits. Employers are permitted to participate in these proceedings. Because an employer’s contribution increases when a former employee receives benefits, it may be to the employer’s advantage to contest claims whenever a former employee should not receive benefits (e.g., misconduct). In addition, the benefits contesting procedures may serve as means of gathering information whenever a former employee has filed or is likely to file, a discrimination charge or other lawsuit against the employer. On the other hand, the procedures provide the employee an opportunity to provide testimony adverse to the employer and, truthful or not, this testimony becomes a matter of record.
Coverage
Every new business is required to register with the Illinois Department of Employment Security (IDES) within 30 days of start-up. This is done by either registering electronically online through the MyTax Illinois website or by submitting a completed and signed UI-1 form, “Report to Determine Liability Under the Illinois Unemployment Insurance Act.”
Employer contributions
Each employer is required by the act to pay contributions equal to the statutorily specified percentages of employment wages paid. For 2022, the initial contribution rate is 3.525% of the first $12,960 in wages paid to each employee per year. The rate remains at 3.252% for an employer whose employment record is chargeable with benefits for less than eight calendar quarters. Once an employer’s employment record has been chargeable for at least eight calendar quarters, then the rate is calculated depending on how successful the employer is in preventing its account from being charged. The maximum contribution rate, however, is 7.625% (except for employers participating in the Short-Term Compensation Program). The minimum and maximum tax rates (based on annual salary up to $12,960 per employee) are 0.001 (or $12.96 per employee) and .725 (or $939.60 per employee). Once an employer is notified of the contribution rate, it has 20 days to file an application for review and redetermination of the rate.
Employers are required to file tax reports with the Department. Failure to do so can result in the imposition of a penalty and in increased tax rates. Also, if an employer fails to make a required report or to pay a contribution owed under the act, it may be prevented from employing individuals until such time as the employer makes the report or pays the contribution. Correct and timely filing of reports and payments will save employers money. Filing of reports and payment of taxes can be done electronically. Certain employers are required by law to file and pay electronically, unless they obtain a waiver from the Department.
Benefit eligibility
To establish an eligible unemployment insurance claim, a person must have worked and earned wages during the first four quarters of the previous five completed quarters prior to filing a claim. This period of time is called the “base period.” The base period changes every three months at the beginning of each new quarter starting in January, April, July and October.
To qualify monetarily, a person must meet each of the following requirements:
- have been paid wages in two or more calendar quarters in the base period
- have total base period wages of at least one to one-and-one -half times the wages in the quarter having the highest earnings
- have at least $1,600 total wages in the base period (a recent 12-month period)
- have earned at least $440 outside of the base period quarter in which earnings were the highest.
In addition to monetary qualification, an unemployed individual is eligible for benefits if the following criteria are met and if the individual is not disqualified for one of the reasons set out in herein in the section entitled, Benefit disqualification on page 483. Requirements for eligibility are as follows:
- has filed an initial claim by Internet and reports as directed to file for subsequent weeks
- has registered for work and continues to report to the Department
- is able to work, is available for work and is registered for and actively seeking work
- has served a one-week waiting period after filing a claim for which no benefits are paid
- participates in reemployment services, such as job search assistance services, whenever the claimant has been determined to be likely to exhaust regular benefits and to need reemployment services
- submitted to the Department a valid Social Security number.
There is no time limit for filing for unemployment insurance benefits after separation from employment. However, it is to the employee’s benefit to file as soon as possible after separation, since the base period for computing the amount of unemployment benefits is the first four quarters of the last five completed quarters prior to filing.
Calculating unemployment benefits
An unemployed individual is paid benefits that are calculated with regard to his or her wages paid during a base period. The base period consists of the first four of the last five calendar quarters that an individual worked. Weekly benefits are l/26th of the total wages paid during the high quarter. If, however, the weekly benefit amount is not a multiple of $1, then the weekly benefit amount is rounded downward to the nearest full dollar amount. The minimum amount an unemployed individual can receive is $51 per week and the maximum amount per week is $471.
For example, suppose the employee worked for several years for your company. The base period for calculating benefits is the first four of the last five quarters. Reported wages for each of the last five quarters were as follows:
- 1st Quarter 2021 $4,800
- 2nd Quarter 2021 $6,400
- 3rd Quarter 2021 $5,400
- 4th Quarter 2021 $4,800
- 1st Quarter 2022 $5,200
In this example, the high quarter is 2nd Quarter 2020, so that-will be the amount of wages that are used to determine unemployment benefits. Weekly benefits will be $246.15, since that is the amount equal to 1/26 of $6,400; however, because the weekly benefit amount is not a multiple of $1, it is ultimately rounded down to the nearest whole number for a final weekly benefit amount of $246.
Benefit disqualification
An individual can be disqualified from receiving unemployment benefits for the following reasons.
- Voluntary termination - Benefits are not paid to employees who voluntarily quit work without good cause attributable to the employer. However, if an employee has good cause to quit, he or she can collect unemployment insurance benefits. The following examples, which are not exhaustive, show some of the types of personal reasons that have been found to be “good cause” for an employee to quit:
- An employee who took an unauthorized leave of absence to respond to a legitimate family emergency was entitled to benefits because leaving was not voluntary.
- A mother who stayed home for over a week when her son came down with chicken pox was entitled to benefits.
- An employee who was subjected to harassment during employment was found to have left work for good cause.
- An individual who quits without good cause will be disqualified from receiving unemployment benefits. Employees can also obtain benefits in some cases by alleging that their resignation was a “constructive discharge.” To do so, the employee must prove her working conditions were so intolerable that a reasonable person would feel “forced” to resign.
- Misconduct - Benefits are not payable if the employee was discharged or suspended for misconduct connected with work, irrespective of whether the misconduct occurs at the workplace or during work hours. The definition of “misconduct” has been amended to be more employer-friendly. Misconduct now includes, but is not limited to:
- conduct demonstrating a conscious disregard of an employer’s interests and found to be a deliberate violation or disregard of the reasonable standards of behavior which the employer expects of the employee
- carelessness or negligence to a degree or recurrence that manifests culpability or wrongful intent or shows an intentional and substantial disregard of the employer’s interests or of the employee’s duties and obligations to the employer
- chronic absenteeism or tardiness in deliberate violation of a known policy of the employer or one or more unapproved absences following a written reprimand or waning relating to more than one unapproved absence
- a willful and deliberate violation of a standard or regulation of this state by an employee of an employer licensed or certified by this state, which violation would cause the employer to be sanctioned or have its license or certification suspended
- a violation of an employer’s rule, unless the claimant can demonstrate that he did not know and could not reasonably know, of the rule’s requirement; the rule is not lawful or not reasonably related to the job environment and performance or the rule is not fairly or consistently enforced.
- Examples include:
- Disregard of employer’s interests and refusal to assist fellow employees - A restaurant dishwasher walked off the job twice because of disputes that arose on the job. The first occasion occurred after the employee had requested training as a cook and was refused. The second incident occurred when the employee refused to carry bus pans from the dining area for a waitress. At a hearing, the Appeals Referee found that the two incidents amounted to misconduct.
- Failure to carry out employer’s instruction - An employee had repeatedly left her cash register open and failed to put change in the cash register. The employee had been repeatedly instructed on the proper procedures and failed to follow the instructions. Therefore, she was not entitled to benefits. An employee’s refusal to work in a freezer also constituted misconduct. There was no showing of medical or health reasons sufficient to prevent the employee from working in the freezer.
- Absenteeism - Continued absenteeism, which hampers the operation of a business, constitutes an intentional disregard of the employer’s vital interests and of the employee’s duties, amounts to “misconduct.”
- Tardiness - Tardiness should be thoroughly documented, and the employee should be notified that tardy arrival may result in discipline, up to and including termination. However, the Unemployment insurance Appeals does not often label occasional tardiness as “misconduct.”
- Refusal of transfer - An employee refused a transfer to a position with the same management classification of her current position and with the same pay and hours of work. The employee was discharged and refused unemployment benefits because her actions were found to be “misconduct connected with work.” However, if for example the transfer would have drastically increased the employee’s commute or the transfer had been to a lower-paying job, the employee might have prevailed on her claim for benefits, due to what would likely be deemed a substantial change in terms and conditions of her employment.
- Poor performance or unsatisfactory conduct - Poor performance (or poor quality of work) and unsatisfactory conduct has been generally found not to be misconduct. In general, if an employee cannot perform the duties of a job because of inability, this does not disqualify the employee from receiving benefits. However, if it can be established that the claimant is capable of performing the job and has done so previously, an employee may be disqualified from receiving benefits.
- Insubordination - An employee who intentionally disobeyed a foreman’s order and disregarded the foreman’s threat of suspension was discharged. This insubordination was found to be misconduct connected with employment and disqualified the claimant from unemployment benefits. In another case, an employee was properly denied benefits because she was insubordinate toward her superior and created a disturbance at her workplace by shouting obscene language at the superior in the presence of other employees and customers.
- Sleeping on the job - The employee was found asleep during working hours by his supervisor, the shop steward and another employee. The following day, the employee was discharged for sleeping on the job. The employee was disqualified from receiving unemployment benefits.
- Negligence - A registered nurse was discharged for failing to properly record medications administered to patients. An employee, who drove a gasoline-filled tank truck, had been involved in several traffic accidents and also tended to exceed the speed limit. Both employees were ineligible for benefits.
- Theft of company property - In cases where theft is proven and supported by competent testimony and/or evidence, reemployment benefits will likely be denied. However, in cases where theft is not proven or backed up by substantial evidence, the employer’s account can be charged, and unemployment benefits granted.
- Failure to work overtime - Failure to work overtime is not, in itself, a disqualifying factor for reemployment benefits. However, failure to work overtime when it is a part of a job description, or an established policy or rule of the employer can disqualify a claimant.
- Suitable employment - The claimant fails without good cause to apply for or to accept suitable employment or to return to customary self-employment when directed by the Department.
- Labor dispute - The claimant is engaged in a labor dispute (which may involve a strike or a lockout) in active process that exists at the place of employment; and the individual is participating in or financing or directly interested in such labor dispute.
Appealing a claim for benefits
Upon receipt of a “Notice of Claim to Last Employing Unit,” if an employer believes that the claimant may be ineligible for benefits for any reason, it should immediately file a letter or a Notice of Possible Ineligibility (Form ADJ030F) if it wishes to be a party to the claims adjudicator’s determination. If an employer does not file to become a party to a determination, it does not have the right to appeal an adverse determination. This Notice must be mailed by the designated Reply Due Date to:
Illinois Department of Employment Security
Labor Dispute & Determination Section
33 S. State St.
Chicago, IL 60603
Where to go for more information
For additional information or to download forms, visit: