Supplemental Unemployment Benefits (SUB) are the benefits provided to the employees in terms of compensation from the employer along with the unemployment insurance provided by the State Government on fulfilling the eligibility criteria.
These benefits are applicable to those employees who have been terminated under closure of the temporary contract period or wrongfully dismissed as per the Unemployment Act. The pay benefits are taxable and can be combined with the unemployment insurance provided by the state to the employee for maintaining his current standard of living. These benefits include:
1) Extended Layoff benefits: During temporary layoff like reduction in the number of workers as a cost cutting measure or hiring the employee after a long duration from selection, the employee is paid at once.
2) Furlough benefits: When employees are made to work for lesser hours due to reduction in force, payments which are not wages are provided as a part of SUB.
SUBs can be supplied from two kinds of funds:
1) Employees collectively contribute to a common fund which is then used to fund the benefits to the employee during unemployment times.
2) Employees contribute to individual accounts from which that employee will reap the benefits from.