Unemployment without Fault: Disqualifications for Unemployment Insurance Benefits
![handle is hein.journals/vllalr17 and id is 671 raw text is: MARCH 1972]
UNEMPLOYMENT WITHOUT FAULT: DISQUALIFI-
CATIONS FOR UNEMPLOYMENT
INSURANCE BENEFITS
DAVID R. PACKARDt
I. INTRODUCTION
EVERY STATE has enacted comprehensive unemployment in-
surance benefit programs covering almost every sector of the
labor force.' Enacted in 1935 as part of the Social Security Act, these
programs now play a vital role in maintaining the economic security of
American workers. Unemployment compensation in the United States
is a federally aided, state administered insurance program2 which relies
heavily on employer contributions.' While many aspects of unemploy-
ment insurance benefits vary from state to state,4 the heart of the
t A.B., University of California at Berkeley, 1964; J.D., 1967. Member of
the California and Maryland Bars.
1. Gradually, unemployment insurance programs have been expanded to cover
additional classes of employees. The federal enabling legislation, Title III of the
Social Security Act, 42 U.S.C. §§ 501 to 503 (1970), excluded all farm workers,
domestic workers, self-employed persons, employees of non-profit organizations and
casual employees of an employer or employing unit with less than eight workers.
Coverage now typically includes some classes of agricultural workers, seasonal labor
and employees of non-profit entities, regardless of the size of the unit. See generally
T. BRODEN, LAW OF SOCIAL SECURITY AND UNEMPLOYMENT INSURANCE 1-18 (1962).
See also Witte, Development of Unemployment Compensation, 55 YALE L.J. 21
(1945). Elective coverage provisions in the various statutes allow for inclusion of
otherwise excluded employees. See, e.g., CAL. UNEMP. INS. CODE §§ 701 et seq. (West
Supp. 1971).
2. Assistance to eligible states, in the form of administrative grants, is author-
ized by section 302 of the Social Security Act, 42 U.S.C. § 502 (1970). State
statutes expressly provide for receipt of federal grants and conform to all mandatory
federal requirements. See, e.g., CAL. UNEMP. INS. CODE § 451 (West 1956) ; MICH.
STAT. ANN. § 17.511 (1968); N.Y. LABOR LAW § 536 (McKinney 1965) ; PA. STAT.
tit. 43, § 767 (1964). Federal grant requirements concern the procedural or admin-
istrative aspects of state programs rather than their substantive parts. Eligibility
conditions and disqualifications for benefits derive solely from state law.
3. Employer contributions are computed on the basis of a complex formula,
taking into account, among other factors, the size of the work force and its
experience rating or actuarial risk. Ineligible unemployment claimants are not
counted against the employer in determining his experience rating. Since unemploy-
ment insurance taxes are a cost of doing business, the employer has a financial
interest in contesting claims. See generally Arnold, Experience Rating, 55 YALE L.J.
218 (1945). Originally, the employee contributed to the insurance system by means
of a wage deduction, but this feature has been eliminated. See, e.g., CAL. UNEMP.
INS. CODE § 976 (West Supp. 1971).
4. The amount and duration of benefits vary greatly from state to state. See
generally T. BRODEN, supra note 1, at 312. According to Professor Broden, these
differences cannot be explained in terms of cost of living or wage scale variances.
They may, however, represent a state's unwillingness to risk losing industry by
imposing on employers the additional taxes necessary to support increased benefits.
Another variable among jurisdictions is the extent and duration of suspending
unemployment benefits due to disqualification. Some states merely impose various
waiting periods while others cancel all accrued benefits. See Kempfer, Disqualifications
for Voluntary Leaving and Misconduct, 55 YALE L.J. 147 (1945).
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Unemployment without Fault: Disqualifications for Unemployment Insurance Benefits
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