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What Is Emergency Unemployment Compensation?

Emergency unemployment compensation was created in the wake of the financial crisis that began in 2007.
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  • Written By: Jessica Ellis
  • Edited By: Bronwyn Harris
  • Last Modified Date: 27 September 2014
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Emergency unemployment compensation refers to a US government unemployment benefits package created in the wake of the financial crisis beginning in 2007. With unemployment rates skyrocketing in the months following the collapse of the housing and financial markets in the United States, the government created the program to help sustain unemployed citizens until the economy entered recovery. Emergency unemployment compensation was extended in 2010 to continue through 2012, though only for those who had not already exhausted the resources of the program.

Unemployment benefits are typically handled at a state level in the United States; each state has its own regulations regarding length and amount of benefit eligibility. Acknowledging the tremendous burden placed on the states following the financial crisis, the US federal government created the emergency unemployment compensation program to extend benefits for qualified workers beyond the limits of state programs. Generally, workers are not eligible for emergency unemployment compensation until they have exhausted their state benefits.

The emergency unemployment compensation program is divided into four main segments, known as Tiers 1-4. Only the first two tiers cover all states, while the third and fourth tiers provide additional relief for states where the unemployment rate is extremely high. Unemployed workers typically need to fill out an application and meet certain requirements to qualify for Tier 1 benefits, but all other tiers may be automatically applied.

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In Tier 1, which is available in all states, workers can receive up to 20 weeks of emergency unemployment compensation. Tier 2 adds an additional 14 weeks, Tier 3 adds 13 more weeks, and Tier 4 provides a final six weeks of coverage. In states that have access to all four levels of the program, a maximum of 53 total weeks of coverage is allowed. Workers do not have to claim benefits every week to remain in the program, so the 53 weeks can be stretched over a longer period if necessary.

Although the package was approved in 2008, it has a “reach back” effect, meaning that it can be used by those who have been out of work since May 2006. In order to qualify, a person must have exhausted all state benefits and cannot qualify for any other form of Federal unemployment. To remain qualified, a person must be able to prove that he or she has applied to at least three jobs, spoken to three potential employers, or completed a combination of these components, every week. Qualifying union members may be able to count their membership as one of the three weekly job search requirements.

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