In the US, all businesses have to pay a quarterly Unemployment tax. The amount they pay is based on a formula that varies from state to state. The monies collected from this tax pay for Unemployment Compensation. That is, when a person loses his job, he is eligible to collect Unemployment for a certain amount of time. In my home state, Michigan, Unemployment will pay him 70% of his previous salary for 26 weeks. This money is supposed to tide him over while he searches for a new job.