Unemployment Insurance is a federal program financed through the Federal Unemployment Tax Act (FUTA). The intent is to pay benefits to eligible claimants during periods of unemployment when suitable work is not available. Unemployment insurance programs play a key role in helping individuals, businesses, communities and the nation’s economy.
An employee must be totally or partially unemployed, earned wages from a covered employer, lost a job through no fault of their own, is able and available for work and must be actively seeking work to qualify for benefits.
Certain types of employment are not directly subject to the federal law including services performed for state and local governments, nonprofit organizations and Indian tribes. However, FUTA requires as a condition for approval of the state’s unemployment law that these entities be covered by state law. In the end, all governmental entities, regardless of size, number of employees or payroll, must be covered by an unemployment program. There are, however, positions that federal law permits states to exclude from governmental coverage. Positions that are not eligible for coverage in Iowa include service performed:
- As an elected official
- As a member of a legislative body, or a member of the judiciary
- As an employee serving on a temporary basis in case of fire, storm, snow, earthquake, flood or similar emergency
- In a position which, under the state law, is designated as a major, non-tenured, policymaking or advisory position or a part-time policymaking position which ordinarily requires eight or fewer hours a week
- As a member of the state National Guard or Air National Guard
Application to Volunteer Firefighters
While volunteer firefighters and other public safety volunteers often receive a per call charge, this is not considered to be wages from a covered employer for the purpose of unemployment insurance. Volunteers are not eligible to receive unemployment benefits, and any compensation should not be included in any unemployment insurance wage report sent to Iowa Workforce Development.
Local government can fund unemployment insurance with one of two methods. The first method is by reimbursable rate, which charges back to the city dollar-for-dollar every benefit that is extended to an eligible local government employee. Essentially self-insurance, this reimbursement method is best for stable entities that do not expect large numbers of layoffs, furloughs or firings. The second method is a contributory rate, which rates government employers based on previous experiences and charges a varying rate based on the compensation for each employee. Government rates tend to be much lower than the private sector because of the favorable long-term track record for government employment.
Government entities are given the choice of how to fund unemployment insurance and can change methods before December of each year. Contact the Unemployment Insurance Tax Bureau of Iowa Workforce Development if interested in changing funding methods. Requests should be made in writing to: Iowa Workforce Development; Attn: UI Tax Operations Manager; 1000 E. Grand Avenue; Des Moines, IA50319.
To qualify for benefits an employee must be totally or partially unemployed, earned wages from a covered employer, lost a job through no fault of their own, is able and available for work and actively seeking work.
Both the employer and the employee can appeal decisions regarding unemployment insurance benefits. The first step is fact-finding, which leads to an initial determination by Iowa Workforce Development. In accordance with federal law, failure to participate in the fact finding interview could result in charges to your account. That determination is provided to both parties, and if either disagrees a hearing will be scheduled. Hearings are usually conducted by telephone conference call. Cases are heard by an administrative law judge from the Unemployment Insurance Appeals Section. Legal procedures are used during the hearing, and as a result witnesses testify under oath, documents can be submitted as evidence and each party has the right to ask questions of witnesses. While legal representation is not required of any party during the hearing, it is recommended that you consult your city attorney regarding how best to proceed.
The administrative judge will make a ruling that can be appealed to the Employment Appeal Board within 15 days from the date of the decision. That decision may be further appealed to District Court and potentially the Iowa Supreme Court.