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Unlike Social Security, which is administered entirely by the federal government, unemployment insurance is organized as a federal-state system. Established under the provisions of the Social Security Act of 1935, the Federal-State Unemployment Compensation Program is the basic program of income support for unemployed U.S. workers. It provides insured wage earners with a partial replacement of their wages during periods of involuntary unemployment. In general, the worker must be able to work, must not have quit without good cause or have been discharged for misconduct, must not be involved in a labor dispute and must be willing to work.
Each state operates its own program under its own laws with only limited federal intervention. Each determines the amount and duration of the weekly unemployment benefits on the basis of prior wages and length of employment. States must extend the duration of benefits when unemployment rises and remains above specified state levels; the federal government shares the costs of extended benefits with the states.