By James Witherspoon

When you have been fired from your job, you may wonder how you will stay financially afloat while you search for a new career. For those individuals who have fallen victim to corporate downsizing because of the economy, there may be hope.

Individuals who lose their jobs for reasons other than performance or behavioral issues may be entitled to unemployment benefits. These individuals must not have been fired for something that they did; most commonly, people who have been laid off because of tough financial times qualify.

The first step in claiming your unemployment benefits is contacting your state’s unemployment agency. The agency will certify that you have lost your job and that it was through no fault of your own. This process usually involves paperwork and proof that your job loss was not your fault.

After this process is complete, your state will contact to you to notify you about your status. If you have been granted unemployment benefits, you will begin receiving checks shortly after your notification. The amount you receive depends on many factors, including your previous job title and income.

If your application is denied, then you will not receive any benefits, and you must find other methods to retain your financial stability when you are between jobs.

It is important to note that since unemployment benefits do not begin right away, you may be reimbursed for the time between the date you lost your job and the date you received your first check.

It is also important to note that unemployment benefits are not permanent; in many cases, they last only a few months, and they terminate immediately after you are reemployed.

If you recently lost your job and you believe that you were wrongfully terminated, visit the website of the Houston employment attorneys of the Ross Law Group for more information.

James Witherspoon

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Unemployment insurance is the name they use for collecting unemployment benefits that you pay into from your state. Some people are confused over how it actually works. It is a type of insurance fund. You and your Employer contribute to the fund through tax withholding on your paycheck. If you should become laid off from your job you can file a claim and begin collecting unemployment benefits. Keep in mind that not everyone is eligible to collect benefits.

Every employee must make contributions to unemployment insurance if you want to be eligible to file a claim. You are required to make such contributions to the premium for six months before becoming eligible. Once you have worked according to your state requirements and have put the proper amount into the fund, you would be qualified to file a claim upon loss of your job.

You must be aware that not all terminations are eligible for benefits. You must have lost your job involuntarily, for reasons such as not enough work, downsizing, seasonal, etc. In the case that you may be fired and not laid off, you will have a review to decide why you were fired and to be sure that it was not due to misconduct. They will contact your employer and ask the reason for dismissal, it is illegal for the employer to give false reasons for termination. You will not be eligible for benefits if you quit your job.

There are requirements to continuing to receive unemployment benefits. When you file, which in most states is available online or through the telephone, your state will tell you of how much you are eligible to collect, your weekly benefit payment amount, and dates to call in for your payments to be issued.

In some states you are required to attend an employment counseling class in which, an unemployment representative will inform you of exact rules you must follow to receive your benefits. It may include:

• Seeking employment if you are able to work and not disabled.
• You will have to pay taxes at the end of the tax year on the benefits you received.
• You must report any income you earn while collecting benefits.
• You are also required to tell them immediately upon returning to work.

If you fail to comply with the regulations of unemployment insurance it is considered fraud. You would be required to payback every penny you received. If the amount you received was large enough, you will face criminal charges and can be imprisoned. Types of fraud are:

• Working off the books and not reporting income.
• Collecting benefits in another name.
• Failure to immediately report returning to work.
• Making any type of income while collecting benefits.

Not everyone will qualify for unemployment benefits, if you have not maintained employment for at least the six months, or you are an independent contractor, you will not be eligible. You may opt for private unemployment insurance to fill any gaps of income. You would give to this the same as public unemployment insurance. You must check with each insurer to verify requirements. Premiums are tax deductible for business owners.

My passion is to help others through their journey in life. To help those who find it difficult to follow the right path, and to teach my children to offer their hands in life. I have a great passion in giving and finding peace and hope in all types of relationships.

Kathleen G. Huertas
http://conservasita.blogspot.com

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By James Cushing

As everyone knows, the current financial climate is precarious at best, which makes knowing one’s rights under Pennsylvania Unemployment Compensation Law vital to one’s financial future. Conventional wisdom, which is largely correct, is the following: an employer must pay unemployment compensation taxes for employees and those employees can collect unemployment compensation benefits if separated from employment (presuming, of course, they meet the statutory eligibility requirements). For unemployment compensation purposes, an employee is basically defined as someone who is dependent upon the business for which he works for income, works for a fixed rate of remuneration from the business for which he works, and whose work is completely controlled by that same business.

Perhaps an employee is best described by what it is not. In contrast to an employee is an independent contractor. Independent contractors, by statutory definition, are ineligible for benefits. An independent contractor is defined by 43 P.S. § 753(l)(2)(B), and the cases decided thereunder, as the following: (1) being free from the direction and control of a purported employer and (2) having an independent business that is not reliant upon a single source for his business. While the above language means is often determined on a case by case basis, general guidelines have been provided in well established Pennsylvania case law. Characteristics of someone who is free from direction and control include, but are not limited to, the following: the individual (1) does not have his taxes withheld by an alleged employer; (2) can accept or reject work at his own discretion; (3) can work for competing entities without fear of reprisal; (4) can control how a job is performed; (5) works without a fixed rate for remuneration; (6) supplies his own tools and/or supplies to accomplish his work; (7) does not receive “on the job training” from the alleged employer; (8) sets his own hours of work; (9) sets his own parameters for his work; and (10) is not dependent upon a single source for his business. As an independent contractor is not an employee, and therefore not eligible for benefits, if one contracts with an independent contractor no unemployment taxes need be paid for that person.

The general rule is if unemployment compensation taxes are paid for an individual, then that person can collect benefits; in the alternative if someone cannot collect benefits, then the unemployment compensation taxes do not have to be paid for that person. However, is there a situation where the tax must be paid for someone but that individual cannot collect? In the context of Unemployment Compensation, the analysis of what makes an employee, as contrasted from an independent contractor, converges onto an owner of a business in a way that is inequitable. The inequity appears to be derived from exploiting both sides of businesses as legal entities independent from both its owners and employees.

An owner of a business, who works and earns income for the business he owns, is considered to be an “employee” for whom unemployment compensation taxes must be paid because the owner depends upon the business for his income and the business completely controls the owner’s work. However, in reality, as the owner of the business, he controls what work the business does and how it is performed. Therefore, the business owner simultaneously controls and directs the business (fitting the criteria for an independent contractor) on the one hand, while being dependant upon and controlled by the business for both work and income (fitting the criteria for an employee) on the other hand.

Taking full advantage of a business owner’s dual role as independent contractor and employee, Pennsylvania Unemployment Law as presently written and interpreted, treats a business owner as either an employee or independent contractor when it most benefits the government as opposed to the owner. Therefore, although a business owner pays unemployment compensation taxes on his own income from his business because he fits the criteria of an employee, if that same business owner becomes separated from the business for any reason (except for the exception detailed below) then that business owner is ineligible to collect unemployment benefits because he also meets all of the criteria for an independent contractor listed above. Therein lays the hidden inequity: a business owner must essentially pay a tax for which he cannot receive the benefit.

The only exception that would allow a typical business owner to collect unemployment benefits is if he is forced to terminate his relationship with the business through an involuntary bankruptcy. An involuntary bankruptcy is considered to be analogous to the involuntary termination of one’s employment from an employer. Perhaps this is a clue as to the rationale behind the general rule that business owners must pay for but cannot collect unemployment benefits for themselves. A business owner is essentially his own employer and could hire himself and lay himself off repeatedly at will, theoretically making himself eligible for unemployment benefits over and over again. Perhaps lawmakers believed a business owner holds too much control over the employment relationship with the business itself to allow him to collect benefits.

It is interesting to note that, aside from the above exception, a Pennsylvania statute specifically carves out an exception for real estate and insurance agents in 43 P.S. § 753(l)(4)(17). The statute specifically indicates that although real estate and insurance agents may own, at least in part, the businesses for which they work, unemployment compensation law will specifically deem them to be exclusively independent contractors as opposed to simultaneously employees. Therefore, there is no requirement under Pennsylvania statute for real estate and insurance agents to pay unemployment compensation taxes. Thus far, the cases decided under 43 P.S. § 753(l)(4)(17) have not expanded its application beyond the specific exceptions for real estate and insurance agents to include individuals in other professions but with the same sort of owner/employee arrangement relationship.

Most people expect to have the safety net of unemployment compensation benefits if they unfortunately lose their job. However, if one owns a business and pays unemployment compensation taxes for oneself, he should be aware that the payment of the tax does not entitle him to collect the benefit. This may be clearly inequitable on its face, but until it is changed it is imperative that business owners be aware that the safety net they may be hoping for will not catch them if they can no longer work for their business.

James W. Cushing, Esquire
Law Office of Faye Riva Cohen, P.C.
2047 Locust Street
Philadelphia, PA 19103
P: 215-563-7776
F: 215-563-9996
http://www.fayerivacohen.com

Originally published in “Upon Further Review” on 10/8/09: http://uponfurtherreview.philadelphiabar.org/page/Article?articleID=6b565654-0c4d-4452-b22a-bc0956cce584

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