What are Supplemental Unemployment Benefits?
Supplemental Unemployment Benefits, also briefly called SUBs, are private funds set aside by the employer to provide additional unemployment compensation to employees in case of lay-off or termination not due to the employee’s own doing or reasons.
A SUB usually emanates from an agreement between the employer and a labor union during a labor dispute negotiation, wherein a trust fund will be organized and put up as part of employer-union agreement. Employers will then contribute regularly to the special unemployment fund, based on a specifically agreed amount computed on per-hour and per-employee bases.
Similar to the Federal-State Unemployment Compensation benefit, employees who were terminated for good cause or who voluntarily resigned from the company are not eligible as recipients of supplemental unemployment benefits.
In addition, payment of SUB to a laid-off worker will not affect the employee’s eligibility for state unemployment compensation benefits; hence, its essence as supplemental or additional unemployment assistance in case of involuntary separation from the company is upheld.
Most of the essential information that employees need to know about supplemental unemployment benefits are tax related, as determinant to the unemployed worker’s tax liability in receiving SUB payouts.