Under which act is unemployment compensation funded?

Unemployment compensation is funded specifically under the Federal Unemployment Tax Act (FUTA). This Act establishes a federal framework for the unemployment insurance system in the United States, allowing states to collect a tax on employers to fund unemployment benefits. The revenue generated through this tax provides the necessary funds for states to administer their unemployment insurance programs, which in turn support unemployed workers.

While the Social Security Act plays a significant role in various social welfare programs, including retirement and disability benefits, it is not directly responsible for funding unemployment compensation. The Family and Medical Leave Act focuses on job protection for employees during family or medical leave, and the Fair Labor Standards Act regulates minimum wage and overtime pay but does not pertain to unemployment benefits. Thus, FUTA is the specific legislation that directly ties to the funding and management of unemployment compensation in the United States.