Which U.S. law created federal unemployment insurance as part of the New Deal?

The U.S. Social Security Act of 1935 created the federal-state unemployment insurance system as part of the New Deal.

President Franklin D. Roosevelt signed the act in 1935. Besides establishing old-age benefits and aid programs, it created a framework encouraging states to provide unemployment compensation to eligible workers who lose jobs through no fault of their own.

The system is funded primarily through payroll taxes under the Federal Unemployment Tax Act and related state laws. States administer their own programs, set eligibility rules, determine benefit amounts, and define covered employment within federal requirements.

Unemployment insurance is different from workers’ compensation. Unemployment insurance generally addresses job loss and availability for work, while workers’ compensation covers job-related injuries or illnesses. The Social Security Act also differs from the Fair Labor Standards Act, which governs wages, overtime, and child labor.