Glossary of Selected Unemployment Compensation Terms

National Foundation for Unemployment Compensation & Workers' Compensation

Annual Wage Formula

A benefit formula which computes the individual's weekly benefit amount as a percentage of total wages in the base period as opposed to a high quarter or average weekly wage formula.

Average Weekly Wages (AWW)

  1. For an individual worker, the result obtained by dividing the individual's total wages in a specified period either by the total number of weeks in the period, or by the number of weeks for which wages were payable to the individual during the period.
  2. For a group of workers, the result obtained by dividing the total wages for one or more quarters by the number of weeks in the period, and then dividing by the average monthly employment for the payroll period including the 12th of each month during the period.

Average-Weekly-Wage Formula

A benefit formula which uses a computation of an individual's average weekly wage during the base period as a basis for determining the individual's weekly benefit amount.

Base Period (Base Year, BP)

A specified period of 12 consecutive months or, in some States, 52 weeks preceding the beginning of a benefit year during which an individual must have the required employment and/or wages in order to establish entitlement to compensation or allowances under an applicable program.

Benefit Eligibility Conditions (Eligibility Requirements)

Statutory requirements which must be satisfied by an individual with respect to each week of unemployment for which compensation or allowance payments are claimed before payment for the week is made.

Benefit Formula

A mathematical formula specified in State unemployment compensation law or Federal laws used as the basis for determining an individual's weekly benefit amount and potential maximum benefit entitlement.

Benefit Year (BY)

A period, generally a 52-week period, during which an individual claimant may receive his/her maximum potential benefit entitlement.

Claimant Fraud

The willful misrepresentation or nondisclosure of a material fact by a claimant for the purpose of obtaining benefits to which the individual is not entitled.

Combined-Wage-Claim

A claim filed in one State against wage credits earned in two or more States.

Computation Date (Experience-Rating)

The date as of which employer's experience is measured for the purpose of determining contribution rates.

Continued Claim

A claim filed by mail or in person for waiting period credit or payment for one or more weeks of unemployment.

Contribution Report

An employer's quarterly report of total and taxable wages, the amount of contribution due a State unemployment fund.

Dependents' Allowance

Special allowances provided under some State unemployment compensation laws to beneficiaries with family support responsibilities as defined under the statutory provisions of the laws.

Disaster Unemployment Assistance (DUA)

The Stafford Act, Sec. 410, authorizes the U.S. President to provide to any individual unemployed as a result of a major disaster such assistance as the President deems appropriate while the individual is unemployed.  Funds for this assistance and administrative costs are provided by the Federal Emergency Management Administration (FEMA).

Dismissal Payments

Wages that recognize past service, paid according to a formal plan, generally related to the employee's length of service.

Earnings Allowance

The amount prescribed by State unemployment compensation laws that a claimant may earn without any reduction in the weekly benefit amount for a week of total unemployment.

Employee Contributions

The unemployment compensation taxes required by some State unemployment compensation laws to be deducted by the employer from an employee's pay and paid with the employer's contribution to the State agency.

Employer

An employing unit, as defined, subject under State or Federal unemployment compensation laws.

Employer Contributions

Taxes, including voluntary contributions and special assessments, paid by subject employers into a State unemployment fund.

Employment Security Administration Account (ESAA)

A special account in the Unemployment Trust Fund, financed by the Federal unemployment tax (FUTA), used to pay for the administration of the Federal-State employment security programs.  Under certain conditions, monies in this account are distributed to other special funds: (1) the Federal Unemployment Account (FUA); (2) the Extended Unemployment Compensation Account (EUCA); and (3) State Accounts in the Unemployment Trust Fund.

Exhaustion

All benefit entitlement has been used.

Experience Rate

A rate of contribution that differs from the standard contribution rate, computed for an individual employer under the experience-rating provisions of a State unemployment compensation law.

Experience-Rating

A method for determining the contribution rates of individual employers on the basis of the factors specified in the State unemployment compensation law for measuring an employer's experience with respect to unemployment.

Extended Benefits (EB)

The supplemental program that pays extended compensation during periods of specified high unemployment to individuals for weeks of unemployment after (1) they draw the maximum potential entitlement to regular compensation within their benefit year or (2) after their benefit year ends while they are in continued unemployment status and have insufficient wage credits to establish a new claim provided, however, that the extended benefit period in the State began prior to the end of their benefit year.  Extended benefits paid to claimants under State unemployment compensation law are jointly financed on a 50-50 basis by State and Federal funds; extended benefits paid to UCFE are totally financed by Federal funds.

Extended Unemployment Compensation Account (EUCA)

An account in the Unemployment Trust Fund from which the Federal portion of shareable extended benefits and Emergency Compensation authorized by the Congress are paid to State agencies.

Federal Employer Identification Number (FEIN)

The identification number assigned to employers by the Internal Revenue Service to control reporting and accounting functions.  Not compatible with the employer account number assigned by State agencies.

Federal Supplemental Benefits (FSB)

A temporary Federal program totally financed by Federal funds that pays supplemental compensation during specified periods of high unemployment to individuals who have exhausted their regular compensation, State-financed additional benefits, and/or the jointly financed Federal/State extended benefits.

Federal Unemployment Account (FUA)

An account in the Unemployment Trust Fund from which repayable advances are available to States whose unemployment fund reserves are temporarily unable to meet current benefit payments.

Federal Unemployment Tax

The excise tax imposed by the Federal Unemployment Tax Act on employers with respect to having individuals in their employ.

Federal Unemployment Tax Act (FUTA)

Chapter 23 of the U.S.  Internal Revenue Code, (Sections 3301-3311).

High-Quarter Formula

A benefit formula which uses an individual's highest quarter of wages in the base period to compute the weekly benefit amount.

Higher Authority Appeal

The higher of two administrative authorities provided by State unemployment compensation laws to make decisions with respect to appeals.

Interstate Combined-Wage Claim

A combined-wage claim in which the paying State is not the State in which the claim is filed and the interstate claims procedures are used in making the payment.

Intrastate Combined-Wage Claims

A combined-wage claim in which the paying State is also the State in which the claim is filed and to which the other State or States will transfer wage credits.

Lag Quarter(s)

The quarter(s) between the end of a base period and the quarter which includes the beginning date of the benefit year.

Liable State

Any State against which a worker files a claim for compensation through the facilities of another (agent) State.

Lower Authority Appeal

The lower of two administrative authorities provided by the State unemployment compensation laws to make decisions with respect to appeals.  A State agency with only one appeals authority should consider that as a lower appeals authority.

Mass Partial Unemployment

Partial unemployment of a large number of workers in a given employing unit occurring at approximately the same time and arising from a reason common to all such workers.

Mass Separation Notice

A report in some States of a mass separation sent by an employer to the State agency listing the names of workers separated and other required data thus eliminating the need for individual separation notices.

Maximum Potential Benefit Amount

The largest amount of benefits for weeks of total unemployment that an individual may receive under a State or Federal unemployment insurance law.

Maximum Potential Duration

The highest number of weeks of total unemployment for which benefits are payable to any claimant in a benefit year or other period of eligibility under a State or Federal unemployment compensation law.

Maximum Weekly Benefit Amount (MWBA)

The highest weekly benefit amount for a week of total unemployment as provided under a State or Federal unemployment compensation law.

Monetary Determination

A written notice issued to inform an individual whether or not the individual meets the employment and wage requirements necessary to establish entitlement to compensation under a specific program and, if entitled, the weekly and maximum benefit amounts the individual may receive.

North American Industry Classification System (NAICS)

Developed jointly by the U.S., Canada, and Mexico to provide new statistical comparability on business activity across North America.

Nonmonetary Determination

A decision made by the initial authority based on facts related to an issue under the following conditions: (1) the present, past, or future benefit rights of a claimant or claimants are involved; (2) there are identifiable documents showing the type and disposition of an issue, the material facts considered in arriving at the determination, and the legal result; and (3) the determination, if it involves the denial of benefits, is issued in the form of a written determination notice to the claimant.  (No determination denying benefits may be considered to be a nonmonetary determination until the claimant has been afforded an opportunity to furnish any facts he/she may have relating to disqualifying information received from other sources.)

Overpayment

An amount of benefits paid to an individual to which the individual is not legally entitled, regardless of whether or not the amount is subsequently recovered.

Pooled Account

A fund in which all contributions are mingled and undivided and from which benefits are payable to all eligible claimants.

Potential Duration

The total number of weeks of total unemployment for which an individual claimant may receive benefits in a benefit year or period of eligibility under the entitlement provisions of a State or Federal unemployment compensation program or any other program administered by a State agency.

Regular Compensation

Benefit payments to individuals with respect to their unemployment under any State unemployment compensation law, including payments pursuant to 5 U.S.C.  chapter 85, but not including additional, extended, Disaster Unemployment Assistance, or Trade Readjustment Allowances.

Reimbursable Employer

Certain nonprofit organizations, State or local government and political subdivisions which elect or are required to pay into the State unemployment fund a sum in lieu of contributions as provided in the State unemployment compensation law.

Request Reporting

The method used by a State agency to obtain a wage and separation report from a base period employer(s) after the claimant files a new or transitional claim.

Reserve Account

A separate account maintained in a State unemployment fund with respect to a subject employer to which are credited contributions paid by such employer and to which are charged all and only those benefits which are based on services performed for such employer.

Seasonality Determination

A determination made as to whether the seasonality provision of the State unemployment compensation law shall be applied to the benefit rights of workers employed in seasonal operations of an industry, occupation, establishment, or employer.

Special Tax Rate

A rate assigned to the employer account that did not result directly from a computation method under regular experience-rating provisions of the State unemployment compensation law.

Standard Contribution Rate

The basic rate of contributions from which variations are computed under the experience-rating provisions of a State unemployment compensation law.

SAWW

State average weekly wage.

SMHW

State minimum hourly wage.

Unemployment Compensation for Ex-Servicemen (UCX)

A federal program that provides benefits to ex-servicemen established by 5 U.S. Code, Chapter 85.

Unemployment Compensation for Federal Employees (UCFE)

The Federal program that provides benefits to Federal employees established by 5 United States Code, Chapter 85.  Supplemental extended compensation is payable to Federal employees under other provisions of State and/or Federal laws during periods of high unemployment.

Uniform Base Period

A base period which starts on the same calendar date for a new or transitional claim for all claimants.

Uniform Benefit Year

A benefit year which starts the same date for all claimants in a State.

Uniform Duration

A provision of State unemployment compensation laws establishing the same number of weeks of potential duration for all eligible claimants.

Variable Duration (Individual Duration)

A provision of State unemployment compensation law under which the potential duration varies from individual to individual in accordance with the length of employment and amount of wages earned in the base period.

Voluntary Contributions

Voluntary payments made by a subject employer credited to the employer's experience rating account in order to obtain a more favorable experience rate.

Wage and Separation Report

A form used by a State agency to request a report from a base period employer regarding the wages earned by the claimant and reason(s) for separation from employment.

Wage Credits

Wages earned by persons working in employment covered by State unemployment compensation laws.

Wage Record

Individual name, SSA number, wages and hours worked information.

Wage Report

A quarterly report by a subject employer listing the name, SSA, wages and hours worked of an individual workers in employment during the quarter.

Wages in Lieu of Notice

Standard wages paid following formal notice of separation.

Waiting Period

A week of unemployment for which a claimant does not receive compensation but must meet the same eligibility requirements that are necessary to qualify for receipt of compensation for subsequent weeks of unemployment during the benefit year.  (In some States, the waiting period, after specified periods of unemployment, may become compensable.)

Week of Partial Unemployment

A week in which an individual works less than regular full-time hours for his/her regular employer because of lack of work, and earns less than the amount specified in the definition of a week of total unemployment but more than the allowable earnings prescribed by the State unemployment compensation law, so that, if eligible, the individual receives less than his/her full weekly benefit payment.

Weeks Compensated

The number of weeks of unemployment for which benefits are paid.

Week of Unemployment

Any week during which an individual is totally or partially unemployed.

Weekly Benefit Amount (WBA)

The amount payable to a claimant for a compensable week of total unemployment.

Weeks Claimed

The weeks covered by intrastate continued claims and interstate continued claims taken as agent state for which waiting period credit or payment of compensation is requested.

Disclaimer:  The information contained in the examples given on this page is general in nature and is not intended as legal advice.  There are no guarantees that a particular state unemployment adjudicator will rule as others have in the cited examples.  Individuals seeking legal advice concerning the handling of similar matters should consult with their attorney, rather than relying upon the information given.

The purpose of this document is to educate clients and potential clients about unemployment compensation. While some effort has been made to address the many differences in laws and procedures in the 53 different jurisdictions (each of the fifty states plus Puerto Rico, Washington D.C. and the Virgin Islands), the primary purpose of this presentation is to review some basic principles shared by many jurisdictions.