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Patrick, Esq.
Patrick, Esq., Lawyer
Category: California Employment Law
Satisfied Customers: 7663
Experience:  Significant experience in all areas of employment law.
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how will freelancing work affect my Unemeployment in California?

Resolved Question:

how will freelancing work affect my Unemeployment in California? Will I lose my benefits?
Submitted: 1 year ago.
Category: California Employment Law
Expert:  Patrick, Esq. replied 1 year ago.
Good afternoon and thank you for entrusting me to answer your question. I will do everything I can to assist you.

I believe that Unemployment Insurance Code section 1300, which dubs itself the "Self Employment Assistance Program" (or SEAP), addresses your inquiry. That sections states:

"The Legislature finds that the traditional system of unemployment compensation is primarily designed to provide income support for workers who are temporarily laid off or expect to be unemployed for only a short time. However, increasing numbers of workers are losing their jobs permanently due to rapid technological change, elimination of trade barriers, and similar causes. These workers need additional tools besides the basic income maintenance provided by the unemployment compensation system in order to reenter the workforce. For some of those workers, access to a self-employment program would be the best path for them to do so. Accordingly, it is the purpose of this article to authorize the payment of unemployment compensation benefits, and to provide appropriate training and support services, for eligible dislocated workers who wish to become self-employed in their transition back into the workforce."

In other words, engaging in self employment such as freelancing does not operate to immediately disqualify one's self from unemployment. However, this is a very complex and potentially hazardous ground to be treading. This is because you must be "actively seeking work" in order to continue being eligible to receive benefits.

Accordingly, a self-employed person remains "unemployed" for the purposes of eligibility for benefits, as long as the person has not entirely withdrawn from the labor market, i.e., determined that he/she is no longer available for employment. Furthermore, any self-employment income must be reported pursuant to UI Code section 1279(c).

If income exceeds the benefit amount a person in your circumstance would be entitled to in a given week, you would no longer be eligible for benefits in that week. Also, your UI entitlement will be reduced by however much money you make through self employment (i.e. if your UI claim entitles you to $300 a week and you earn $200 freelancing, you would only get $100 in UI insurance that week.

To summarize, an individual in your circumstance can conceivably remain "unemployed" for the purpose of obtaining UE benefits if they are engaging in freelance work, as along as they are "able and available" to accept new employment. You must report all income from your freelancing endeavors, and your benefits will be reduced by the amount of any actual income.

Please do not hesitate to let me know if you have any questions or concerns regarding the above and I will be more than happy to assist you further.

If you do not require any further assistance, please be so kind as to provide a positive rating of my service so that I may receive credit for assisting you. Very best wishes to you and thank you so much for coming to Just Answer.
Customer: replied 1 year ago.

If I report freelance income for two consecutive 2-week pay periods (4 weeks) and this income exceeds my UI income I think I get dropped from UI, is that correct?

Expert:  Patrick, Esq. replied 1 year ago.

Elliot,

Thank you very much for your reply.

"If I report freelance income for two consecutive 2-week pay periods (4 weeks) and this income exceeds my UI income I think I get dropped from UI, is that correct?"

This is actually incorrect. You can always go back to collecting benefits provided that you can demonstrate to the EDD's satisfaction that you are able and available to accept work and actively seeking new work. No disqualification will result if you exceed your benefits alottment in income for two or more consecutive weeks.

Again, please feel free to let me know if you have any further concerns. If I have answered your question, I would be very grateful for a positive rating of my service so that I may receive credit for assisting you.

Kindest regards XXXXX XXXXX wishes to you moving forward with your freelancing efforts.

Patrick, Esq., Lawyer
Satisfied Customers: 7663
Experience: Significant experience in all areas of employment law.
Patrick, Esq. and other California Employment Law Specialists are ready to help you

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Patrick, Esq.
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