Unemployment benefits are essentially a mandatory insurance policy your employer and the employee are forced to pay on your behalf. You can’t opt out. So while you are employed this is in effect coming out of YOUR paycheck.
The correct way to handle unemployment is either:
- make the coverage optional so that the employer can pay more money up front to the employee.
- Pay out all benefits in one lump sum just like any other insurance settlement with a valid claim on a loss.
If paid in a lump sum most people would have incentive to find work immediately.
Except in one or two states, unemployment insurance is paid for by a tax on employers, not employees. I worked at two different state’s unemployment offices for a total of about 17 years.