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LawTalk
LawTalk, Attorney
Category: California Employment Law
Satisfied Customers: 27889
Experience:  I have 30 years of experience in the practice of law, including employment law and discrimination law.
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I just filed an unemployment benefits claim. The EDD employee

Customer Question

I just filed an unemployment benefits claim. The EDD employee asked me several times if I'm self-employed. I answered that I'm not. I wonder why he was asking me this and how it may impact my unemployment compensation.

--I worked temporally under W2 for two employers.
--I also did an assignment for another company under 1099.
-Before that I was receiving unemployment for a year.
--Before that I worked for 5 years for two companies as an employee.

In reviewing my files, I realized that I didn't tell the EDD employee about the assigmnet I did under the 1099. Any major problems with that? I answered to my best recollection, I just forgot about this assigment that barely lasted a week.
Submitted: 2 years ago.
Category: California Employment Law
Expert:  Tina replied 2 years ago.
Hello and welcome,

The commission will typically deny benefits if the worker's primary income comes through self-employment since such individuals are not normally required to pay unemployment taxes (but may elect to do so, which is another subject).

In addition, "An individual is ‘unemployed’ in any week during which he performs no service and with respect to which no wages are payable to him, . . ."

So, if he receives self-employment income, he is not necessarily unemployed as defined by the law.

Here is a link that provides more information on this:

http://edd.ca.gov/UIBDG/Total_and_Partial_Unemployment_TPU_41505.htm

However, working during a week and receiving self-employment income can disqualify the individual from receiving benefits, at least for that week. In addition, if you were to receive most of your income from self-employment, that would normally disqualify you as well.

Forgetting about one week's pay from self-employment should not normally affect the status of your claim or eligibility for benefits as long as those earnings were not earned during the period in which you are receiving benefits.


Please remember to press the smiley faces/stars on the right of your screen when we are finished with our communication so I will be credited for my time. Kindly remember to ONLY rate my answer when you are fully satisfied. If you feel the need to rate anything less than OK, please stop and reply to me via the REPLY TO EXPERT or CONTINUE CONVERSATION button with whatever issue or clarification you may need. I will be happy to continue further and assist you until I am able to explain your concern to your satisfaction.

Thank you and all the best to you,

Tina

If you experience technical problems, please let me know or contact support@justanswer.com

Customer: replied 2 years ago.
Tina,
Thank you for your answer. Here is a follow up:


So how does the EDD determine if I'm self-employed; that is if my income comes from self-employment activity? here is my most recent work history:

--I worked temporally under W2 for two employers. (4-months and 2-weeks)
--I also did an assignment for another company under 1099.
-Before that I was receiving unemployment for a year.
--Before that I worked for 5 years for two companies as an employee.
Expert:  Tina replied 2 years ago.
There can be some grey areas in determining this, but generally, "Any self-employed individual, business owner, or general partner who meets the requirements, such as receives the major part of his or her income from the trade, business, or occupation in which he or she is self-employed or a general partner may apply for coverage" would be considered self-employed under the law.

Here is a link that sets out this definition:

http://www.edd.ca.gov/disability/Self-Employed_Eligibility.htm


Please remember to press the smiley faces/stars on the right of your screen when we are finished with our communication so I will be credited for my time. Kindly remember to ONLY rate my answer when you are fully satisfied. If you feel the need to rate anything less than OK, please stop and reply to me via the REPLY TO EXPERT or CONTINUE CONVERSATION button with whatever issue or clarification you may need. I will be happy to continue further and assist you until I am able to explain your concern to your satisfaction.

Thank you and all the best to you,

Tina

If you experience technical problems, please let me know or contact support@justanswer.com

Customer: replied 2 years ago.
My question has not been answered. I don't have a clear idea or indication about if the EDD will consider my case as 'being self-employed' or how the EDD defines self-employed. (in the link you sent me the term to be defined is a part of the definition--does not define "self employed")

I understand that this may require a deeper degree of expertise. I also acknowledge you effort to give me the best possible answer. But this does not mean that the question has been answered.

Thank you anyway. I will rely on your service again when I have a different question.

Best,

JJ
Expert:  Tina replied 2 years ago.
As I indicated, there are grey areas and are the subject of much litigation, but generally a self-employed individual is one who:

receives the major part of his or her income from the trade, business, or occupation in which he or she is self-employed or a general partner

The link I provided sets out this definition. Of course, anyone who receives a 1099 can be considered self-employed since they are an independent contractor, but that is not enough to disqualify one from benefits alone typically. Only if they fit the definition of self-employed above could they normally be disqualified as they would have the ability to elect to pay unemployment tax as set forth in the link I provided above.

However, as I suggested, if you receive income through self-employment during the term you are receiving benefits, THAT must be reported to the commission as it would typically reduce your benefits, at least for the week self-employment income was earned.

I hope that helps clarify my answer for you.

Please remember to press the smiley faces/stars on the right of your screen when we are finished with our communication so I will be credited for my time. Kindly remember to ONLY rate my answer when you are fully satisfied. If you feel the need to rate anything less than OK, please stop and reply to me via the REPLY TO EXPERT or CONTINUE CONVERSATION button with whatever issue or clarification you may need. I will be happy to continue further and assist you until I am able to explain your concern to your satisfaction.

Thank you and all the best to you,

Tina

If you experience technical problems, please let me know or contact support@justanswer.com



Customer: replied 2 years ago.
Tina,
please, notice that the following doesn't define what a self-employed is because the term to be defined is used in the definition.


receives the major part of his or her income from the trade, business, or occupation in which he or she is self-employed or a general partner



So, I don't know how I should expect to be considered by the EDD, just because in my intention to find a permanent job I worked a couple of times under a W2 and I accepted an assignment for which I had to fill out a 1099.

That's why I feel that this specific question hasn't been answered.


On the other hand, I checked my records and did not receive any benefits after I invoiced the company I worked for (the one that issued the 1099). I mean that although my benefits claim was open, I didn't claim additional payments from that point. I think I'm just fine on that one. I guess I'll be able to set the record straight if I need to, regarding that I forgot to tell the EDD employee about this income.


Thank you,

JJ
Expert:  LawTalk replied 2 years ago.
Good afternoon,

I'm very sorry to hear of your situation.

Your previous expert opted out and asked me if I could assist you. I can, and in my mind the answer is quite simple and straightforward. I believe that given your fact pattern, it is entirely unnecessary to get into the definition of "self employment".

The simple fact is that if the last job you had, as of the date that you apply for unemployment benefits, was a position where you were issued a 1099---and not a W-2---- then there is a legal presumption that you were self employed. You may not use the end of a position as a self employed individual to qualify for unemployment benefits.

Additionally, what you did or who you may have worked for more than 15 months before the date you apply for benefits is a non-issue also. Only the last 4 quarters of your wages are considered in determining qualification and the amount of the benefit owing in a claim.

Likewise, the issue of self employment---in other words if you were self employed during that 15 month period---is another non-issue, so long as your last job was employment for an employer who issued you a W-2, withheld taxes and paid into the unemployment system on your behalf.

I wish you the best in 2012.

I understand that you may be disappointed by the Answer you received, as it may not necessarily be favorable to your situation. Had I been able to provide an Answer which might have given you a successful legal outcome, it would have been my pleasure to do so.

You may reply back to me using the Reply to Expert link if you have additional questions; and if you do, I ask that you please keep in mind that I do not know what you may already know or with what you need help, unless you tell me.

Kindly take a moment to rate my service to you based on the understanding of the law I provided.
I have no control over the how the law impacts your particular situation, and I trust that you can understand how it would be unfair for me to be punished by a (negative rating) ----the first 2 stars/faces----for having been honest with you about the law.

Thank you,

Doug
Customer: replied 2 years ago.
Doug,
your answer is helping me a lot. Let me share with you the info about my last jobs so we can come to a conclusion about what to expect.


--My very last job before I filed the claim was a 4-months one under W2

--Prior to that I did a two-week assignment under a 1099

--Prior to that I did a 3-week assignment under a W2

-And before that, up to the 15 months period relevant to the case, I was unemployed and receiving compensation.


For what you wrote and in the light of this info, I guess I should not have any problem. what do you think?

Best,

Jj
Expert:  LawTalk replied 2 years ago.
Good afternoon,

As you were clearly employed, not self employed, at the last job you had before you filed for unemployment---then I expect that the employment status will not be an impediment to you getting benefits.

You may reply back to me again, using the Reply to Expert link, if you have additional questions.

Would you please rate me highly now, based on my assistance to you in understanding the law.

I wish you the best in 2012,

Doug
LawTalk, Attorney
Satisfied Customers: 27889
Experience: I have 30 years of experience in the practice of law, including employment law and discrimination law.
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