Understanding the various factors that determine unemployment eligibility and benefit amounts can be challenging. A key feature in this process is the base period. The base period is a specific timeframe used to assess a claimant’s earnings and employment history.
What exactly is a base period? And how do states use it to determine unemployment qualification?
What Is a Base Period?
While qualification rules vary by state, most states will look at wages earned in the base period to determine claimant eligibility. The most used base period calculation is the first four of the last five completed calendar quarters. Neither the current calendar quarter (filing quarter) nor the most recent prior quarter (lag quarter) are used.
Alternate Base Period
Some states may offer an alternative base period for claimants who do not qualify under the standard base period. This base period includes the four most recent completed calendar quarters. This option may benefit workers with recent employment but insufficient earnings.
Extended Base Period
In certain circumstances, such as a work-related injury, illness, or military service, an extended base period may be used. This period can extend further back to include additional earnings, providing another opportunity for claimants to qualify for benefits.
Base Period FAQs
Why are the most recent quarters not used for the base period?
All companies report employee taxable wages to the state on a quarterly basis. These wages are used to calculate claimant benefit amounts and employer liability. Since the current quarter in which the claimant filed is still in progress, the state workforce agency does not have the necessary information to utilize these wages for unemployment purposes. It may also be that the state has not received or processed the wage data from the recently completed quarter.
Therefore, using the first four of the last five completed calendar quarters ensures each agency has the appropriate information to make a timely and accurate determination of monetary eligibility.
Employers in the base period will receive a claim. What happens if you only employed someone for a short time and aren’t a base period employer?
The employers who receive a claim are determined by the claimant’s base period employment and most recent employment. As the most recent employer, you will receive a claim requesting information to determine the claimant’s benefit eligibility. Any companies for whom the individual worked and received wages during the base period will also receive a claim. As a rule of thumb, you may receive a claim for someone up to 18 months after their separation from your company.
While the number of different employers will not impact a claimant’s eligibility, assuming they have met the monetary eligibility criteria, it may impact your chargeability. Next month, we’ll dive into this employer chargeability!
Benefit Year
The benefit year of an unemployment claim begins when an individual files a claim.
The benefit year typically starts on the Sunday of the week of filing or the day on which the claim is filed. From this starting point, the benefit year will last for 52 weeks.
Even though a benefit year is 52 weeks long, the number of benefit weeks, during which an individual can collect benefits, is determined by the state.
Should an individual need to refile for benefits during this 52-week period, their claim will continue to have the same benefit year start date. For an additional claim filed after the 52 weeks have elapsed, a new benefit year will be opened based on the refiling date.
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For more than 40 years, 501(c) Services has been a leader in offering solutions for unemployment costs, claims management, and HR support to nonprofit organizations. Two of our most popular programs are the 501(c) Agencies Trust and 501(c) HR Services. We understand the importance of compliance and accuracy and are committed to providing our clients with customized plans that fit their needs.
Contact us today to see if your organization could benefit from our services.
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The information contained in this article is not a substitute for legal advice or counsel and has been pulled from multiple sources. Some information was provided by our friend, Darby Gibson, Client Marketing & Insights Specialist, at Thomas & Company.
(Images by Kwangmoop and Frolopiaton Palm)
