How to get unemployment if you quit

Americans are quitting their jobs in record numbers. However, they likely won't qualify for unemployment benefits.

Just over 4.4 million people quit in September, an increase of 164,000 from the prior record in August, the Labor Department said Friday.

The quits rate also jumped to 3%, another all-time high. (This measures the number of quits during the month as a percent of total employment.)

The "Great Resignation" may be attributable to many things — pandemic burnout, near-record job openings, higher pay, more workplace flexibility, or a reimagining of one's career.

Whatever the reason, people who quit their jobs typically can't rely on unemployment benefits as a financial buffer during their career transition.

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"Generally, if you voluntarily resign your job, you're not eligible for unemployment," according to Paul Sonn, state policy program director at the National Employment Law Project. "It's not something people who quit their jobs can count on."

There are exceptions to the rule if workers have good reason to quit, Sonn said.

For example, workers who leave a job due to unsafe work conditions or "constructive discharge" (if an employer essentially forces an employee to quit) may qualify for benefits.

States, which administer unemployment insurance, interpret these rules differently.

"It's something decided on a case-by-case basis," Sonn said. "You'd need to apply for benefits and explain the situation."

If states deny benefits, workers may appeal if they feel their voluntary quit constitutes a legitimate claim. The process often takes months, Sonn said.

Congress had expanded the eligibility scenarios during the Covid-19 pandemic. For instance, workers may have qualified for temporary federal unemployment benefits if they quit work for childcare responsibilities. Those federal benefits expired nationally on Labor Day, however.

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Of course, the ability to collect unemployment benefits may be of little concern for workers who are able to pick up another job quickly. Many households have also built up savings during the pandemic.

There were 10.4 million job openings in September, according to the Labor Department. That's the third-highest level on record, behind July (11.1 million) and August (10.6 million), according to data from the Federal Reserve Bank of St. Louis.

Quits have been concentrated in a few sectors of the economy, chiefly those in which most work is in-person or relatively low-paying, according to Nick Bunker, the director of economic research at the Indeed Hiring Lab.  

For example, quits in the manufacturing sector and leisure and hospitality jobs (like bars and restaurants) were up 78% and 43%, respectively, in September versus February 2020, Bunker said. Meanwhile, those in the financial activities sector were up just 5% over that period.

"The 'Great Resignation' is more a story about strong demand for workers, rather than a rethink of work among higher-income workers," Bunker said.

Unemployment benefits are provided only to those who are out of work through no fault of their own. That means if you left your job voluntarily, you usually won't qualify for unemployment. A major exception is that you can still collect unemployment if you "good cause" to quit. What constitutes "good cause" depends on your state's rules.

If you've quit your job and want to apply for unemployment benefits, there are a few things to remember:

• If you had "good cause" to leave your job, you'll usually be entitled to unemployment benefits.
• States vary on how they define good cause, but most allow reasons such as unsafe working conditions, workplace harassment, or your own medical issues.
• If you quit, your employer might contest your claim to unemployment benefits. That means you'll probably have to participate in a hearing and present evidence of your reasons for leaving in order to get benefits.

These points are all discussed in more detail below.

Do You Have Good Cause to Quit?

If you left your job to pursue other opportunities, change careers, start your own business, or go back to school, you didn't have "good cause" to quit. These are all very good reasons to leave a job, but they don't entitle you to collect unemployment benefits. Good cause means you really didn't have another choice.

In some states, benefits will be paid only to those who had job-related reasons for quitting, such as unsafe working conditions. In other states, an employee who has compelling personal reasons to quit (such as a seriously ill family member who needs constant care or a spouse who has been relocated by the military) will also be eligible for benefits.

Here are some situations in which you might have good cause to quit—and be eligible for unemployment benefits:

• Constructive discharge. If your work situation was so untenable that you were really forced to quit, most states will allow you to collect unemployment. If you were subjected to relentless harassment, forced to work in dangerous conditions, or asked to break the law (by falsifying financial records, for instance), and you felt that quitting was your only option, that is likely to qualify as good cause to quit. If a reasonable person in your situation would have found the working environment intolerable, you will still be eligible for benefits in most states.
• Domestic violence. Most states allow an employee to collect unemployment benefits if the employee had to quit work for reasons relating to domestic violence (for example, to relocate with her children).
• Medical reasons. Many states make benefits available to employees who quit because of a disability or an illness or injury. Some states require that the medical condition be related to the job (because the job caused or aggravated the condition); others don't impose this requirement. In some states, an employee who quits because of a family member's medical condition may also be eligible for benefits.

Your state may define good cause more generously. For example, some states provide benefits to an employee who quit to move with a spouse who has accepted a job in another state or has been reposted by the military.

To find out what your state considers good cause for quitting, contact your state's unemployment insurance agency.

Proving You Had Good Cause to Quit

If you claim that you were forced to quit, you'll probably have to go through a hearing process to qualify for unemployment benefits. When an employee is laid off or fired for reasons other than serious misconduct, most employers don't contest the employee's claim. Even though unemployment claims cost employers money, there's no good reason to fight an eligible employee's claim for benefits—and little hope of succeeding.

If an employee claims he or she was forced to quit, however, the employer might have more incentive to contest the claim. The employee won't be eligible for benefits if the employer convinces the hearing officer that he or she quit voluntarily.

And, no employer wants to admit that an employee was constructively discharged (forced to quit because of dangerous working conditions or sexual harassment, for example). Many employers will choose to fight this type of claim, hoping that they can win and avoid setting the employee up for a wrongful termination lawsuit.

How To Prepare For Your Hearing

To prepare for the hearing, think about how you can prove that you had to quit. If you quit for medical reasons, ask your doctor to document your condition and why you could no longer do your job. If you quit to relocate with your spouse, get a copy of your spouse's offer letter (for a distant job) or official paperwork from the military (if your spouse is transferred to another base), as well as any documents showing when you moved.

If you were constructively discharged, you will need evidence that your working conditions were intolerable and you had no choice but to quit. If you were sent harassing email messages, get copies of those. If you filed a complaint of unsafe working conditions or discrimination, get a copy of the paperwork. If coworkers are willing to provide statements about your situation, those may be helpful as well. Anything you can present to show that your situation was untenable and you gave the company an opportunity to correct it will help your case.

What the Hearing is Like

The hearing may be held in person or by phone. If the hearing won't be in person, find out how you can submit your documents. Prepare to explain why you had to quit. If the employer claims that you quit voluntarily, be ready to explain why that's not true. You may find it helpful to make notes of all the points you want to cover at the hearing, so you can make sure you don't leave anything out.

Get Legal Help

Especially if you were constructively discharged, you should consider consulting with an experienced employment lawyer before your hearing. If you were forced out of your job, you may have legal grounds for a lawsuit. In this situation, the outcome of the hearing won't only determine whether you get unemployment benefits; it could also make or break your case.

An attorney can help you make the strongest arguments—and avoid making any mistakes that could come back to haunt you later. An attorney can also use the unemployment hearing to gather information and evidence that might prove useful if you decide to file a lawsuit.

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