Virgin Islands Government seal

Department of Labor

Unemployment Insurance

Introduction & Background

Important Highlights


Federal Unemployment Tax Act (FUTA)

Experience Rating

Reimbursing Employers

Records, Reports, and Audits

Independent Contractors

Localized and Non-Localized Employment

Reciprocal Coverage

Combined Wage Claims

Interstate Claims

Benefit Payment Program

Employment Service




The Background of Unemployment Compensation

Unemployment Compensation was first begun as a national program during the Great Depression of the 1930's as part of a group of social insurance programs. Its purpose was and is to provide compensation to workers who are unemployed through no fault of their own until, normally, they are able to go back to work. The amounts payable as benefits are intended to cover non-deferrable expenses during unemployment, such as housing, food, clothing, and necessary transportation.

The benefits paid help maintain purchasing power which many consider the key to business prosperity. In this way, unemployment compensation promotes economic stability and helps to stave off the downward cycles that lead to economic depressions. Businessmen credit this program with playing an important part in bringing about quick recoveries from business recessions.

Your contributions (taxes) paid to the Virgin Islands Government are used exclusively for payment of unemployment benefits to individuals who are eligible under the law. Your Federal unemployment taxes paid under (FUTA) are used primarily to finance the administration of the unemployment insurance and employment service programs in the Virgin Islands.

For the purposes of the unemployment compensation and employment service programs, the Virgin Islands is treated as a state.