Reply #19: In addition to the 6.2% paid in federal unemployment tax, employers pay a state unemployment tax

[Hamlette]

it's a somewhat complicated formula (in my state) and varies from state to state, but the bottom line is employers pay the first 26 weeks of unemployment benefits for their former employees. It is collected from the employer over the course of 4 years after the UI claim. We are now up to over 1 year of benefits, some of the extensions are paid by additional monies allocated by Congress over the last year or so. Congress has allocated some money for extended benefits as well. (My state hasn't hit the percentage necessary for extended benefits yet but is paying, with the latest extension (second tier temporary benefits), as many as 59 weeks of benefits.)

There is also an experience rating so the more people an employer lays off, the higher his rate will go.

(I work in my state's unemployment office, can you tell? We are seeing sad stuff on all sides with small business being hit extremely hard right now. A person may put all of his or her savings into the company in an effort to stay afloat, and often borrow money for the same purpose. When the company goes out of business, the owner (corporate officer) is often not eligible for unemployment himself or herself. These people are often honest, hardworking, and have tried to do right by their employees. I don't have any trouble helping them. When this recession ends, their unemployment tax rate will stay high for up to four years making their recovery even harder.)