Unemployed insurance is a program whereby qualified individuals who are not employed earn cash benefits for certain duration of time. The funds paid to these individuals are gotten from contributions made by employees, employers and other contributions from the government. It helps workers who have lost their jobs as a result of faults that are not their own to stabilize financially as they look for new jobs.
Many employers look at unemployment insurance as a task involving a lot of paperwork, something that makes it difficult for them. The rates of paying taxes for employers who have reputable records of averting layoffs are varied and might be very low. Employers who handle large numbers of workers who have left their companies and want unemployment insurance can be faced with a heavy burden (Gregory 321).
The unemployment benefits given to those who have lost their jobs are usually on a basis of insurance systems that are made mandatory by the government. Depending on laws that have been put in place and the status of the individual getting the benefits, the amount of money given may be very small and at times covers only basic needs. In other cases, the money may compensate the time the individual has lost when compared to the salary they earned.
This is part of a social security scheme which is larger. Unemployment insurance is extended to those people who have already registered themselves as unemployed. For the money to be considered, a condition that ensures that they are looking for work is imposed (Gregory 321).
In some countries, the obligation of offering unemployment insurance is left to trade or labor unions. This is aimed at ensuring that the government is not overburdened with tasks of identifying those who are qualified to get unemployment insurance. Some workers are not classified as employees but rather fall under the category of independent employers.
Most independent employers are not entitled to unemployment insurance since most of them do not adopt the procedures that are followed by other employers. For instance, they classify their workers as independent contractors in order to avoid meeting law requirements that are expected to be extended to their workers.
Some of these requirements include minimum wage, payroll taxes and overtime payments among other requirements. This makes independent employers different from other bodies that are involved with employment issues. These bodies have to comply with strict requirements that make it mandatory for them to be entitled to unemployment insurance (EDD 3).
Independent employers are also not liable to get unemployment insurance due to the nature of the sector they operate in. worker turnover among independent employers is high and most of the employers do not want to pay insurance premiums for their employees. This is because the workers leave the sectors at a higher rate hence it will be difficult for independent employers to handle the cases.
Independent employers are therefore not entitled to unemployment insurance since it is awarded to people who have lost their jobs from faults they did not cause and have satisfied certain legal requirements.
Works Cited
EDD. Overview – Unemployment Insurance. 2011.web .25 July 2011.
Gregory, Mankiw. Principles of Macroeconomics. New York: Cengage Learning, 2008. Print