If I am collecting unemployment compensation and start a sole proprietorship, will that cause the state to cancel my unemployment benefits? Would the state consider me to be “employed” by my own business even if I am operating at a loss?
Or do I have to generate a reportable income first? Thanks.
I believe the rules vary by states, so you may want to check with your unemployment office.
When I was collecting unemployment, my weekly check was offset by whatever I did manage to earn that week. For example, if my weekly check was $200 then if I earned no money at all I got $200. If I worked 1 day and earned $25 then my check would be $175.
This, however, was based on gross income, not net. With a sole proprietorship you may be bringing money in, but you may also have business expenses. This may mean you have a lower net income when all is said and done. On the other hand, if you can get the business off the ground quickly you might better off in the long run anyway.
Thank you. I will check with the unemployment office, but I’m not sure what you are saying here.
Let’s say that I bring in $100 of revenue, but my expenses were $90. For unemployment purposes in your example, would my benefits be reduced by $100 or $10?
Florida seems to be especially strict on the self employed [PDF]:
It appears you cannot claim unemployment benefits while self employed, even if you have no income.
In my state, if I brought in $100 of revenue then it counted as $100 income, regardless of what my expenses were. And my unemployment was reduced accordingly. At the point where my revenues exceeded the allowable maximum weekly income, then the unemployment payment hit zero, no matter what my expenses.
Your state rules will probably vary, so you really need to check.
Since the op has been answered, I have another hypothetical.
Let’s say that you are currently making $100k per year, but instead of laying you off, your employer says you can stay on, but now you have to work for $8/hr. You refuse.
Does that make you ineligible for unemployment?
These are all legal questions that should be discussed with a lawyer.
I’m going to lock this puppy.
With all due respect to Twickster, the rule says:
(Emphasis added.)
Based on a conversation I had with the OP, his questions are hypothetical and are not about an ongoing case. Therefore, I will reopen the thread.
Gfactor
General Questions Moderator
This depends on the jurisdiction, too. I know that a significant reduction in pay counts as constructive termination for unemployment purposes in Ohio because I won several unemployment cases based on that rule. I don’t know if the rule is the same in other jurisdictions.
Washington is similar. The amount you continue to earn can be subtracted from the benefits, so any full-time position is enough to disqualify you. ($8/hr isn’t even minimum wage here). However, cutting someone back to 10 or 20 hours a week could give them some unemployment benefits.
Many thanks for all of the answers. It looks like these questions should be directed to the locals as there is not a national standard for these things.
No, benefits are strictly a state isue. Even the federal gov’s unemployment taxes are designed to be portioned out for state use in their own programs.
There’s really no way to know because different companies deal with things differently. Some companies never dispute claims other dispute everything even offical lay-offs, in the hope you’ll get frustrated and quit.
Usually you’ll apply get denied then appeal. How the appeal comes out depends on who shows up, your attitude but it really comes down to the person at the unemployment office, who makes up his/her mind.
When I was in H/R we had a policy of managers getting walked ASAP, when they quit. In other words if they gave two weeks notice, we’d let the go ASAP and escort them out the same day.
I had some managers file for unemployment saying they were fired and sometimes unemployment would decide in their favour and sometimes they would decide against them
It really depends on the appeal and their attitude.
As I said - it is based on your GROSS income, that’s strictly money coming in the door regardless of what it is spent on. This is unemployment benefits, not the IRS. In that case, in my state, your benefits would be reduced by $100.
However, rules vary from state to state. See this:
In my state - again, rules vary - such an extreme reduction in pay might allow you to qualify to collect benefits even if you stay on that job… but there’s no way they’re going to give you enough to make up the the balance of that six digit salary. If you’re working at $8/hour 40 hours a week, though, you’ll have a small check.
If, however, you walk off the job - even with such a provocation as an extreme salary reduction - you probably won’t get unemployment benefits at all. I suspect that in such a case you’d wind up needing a hearing to sort the matter out. It would be an unusual circumstance.
Does that make you ineligible for unemployment?
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