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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 118663
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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I own a NY corporation and ceased to be an employee of it

Customer Question

I own a NY corporation and ceased to be an employee of it several years ago. I subsequently worked for another employer for 2 years and that company went out of business. I filed for unemployment and my company has been contacted to appear at the hearing
as well as myself as the individual trying to claim unemployment. This sounds to me like they are trying to make my company pay the unemployment costs. Is this possible?
Submitted: 2 years ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 2 years ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
If you were not working for your company, but you did not close up your company, this is part of the problem. You will have to prove that during the base year period work quarters that you were not employed by your company but by another company. So your company is being called to appear to prove that you are not an employee of your company and do not do any work for the company. That is the reason they are summonsing your company, to bring proof you are not employed there and receive no income from work from your company.
Customer: replied 2 years ago.
I can prove employment by the second company and due to not having any contracts nor income I terminated my salaried position with my company but receive minimal dividends. They know that and have my tax filings to prove it. As owner of the company I do bill the clients which amounts to less than an hour a month and occasionally consult. During the time of unemployment I was actively looking for work and completely available for work at any time. I did minor consulting and recorded that with their online process when I was unavailable. The company did little else resulting in less than $15,000 in total revenue with less than 4 paid out to me. The company has 18,000 in debt and I received small payouts as an owner not any direct compensation for work.
How does one prove lack of employment?
My company is me and who ever I contract. How is my telling them I'm not employed by my company when I filed the claim any different than my telling them I'm not employed by my company again after they received notice from my accountant of my change in filing status in writing on their forms as they required?
What constitutes income? (I was originally told to file because the circumstances I elaborated on above qualified me to receive the payout)
Expert:  Law Educator, Esq. replied 2 years ago.
Thank you for your reply.
You have to show that despite reasonable efforts, your company has not been able to secure adequate contracts for work. You will have to prove what jobs you have applied to get for the company and prove you were turned down.
With your own company it is tougher because as the owner you can control what work is done by the company and they need you to show that you are not intentionally not getting work to collect benefits.
Income is any amount you receive for doing work. So any work you do that you get paid for directly or indirectly is income as far as unemployment is concerned.
Customer: replied 2 years ago.
" you to show that you are not intentionally not getting work to collect benefits" I'm really having a problem with this line of reasoning. This is a presumption of fraud and one no one can "prove" false. The facts are the business at the time couldn't sustain any employees nor a salary for me. Without pay and no employees no one was even looking for more business. If the revenues from the company aren't enough to "prove" the point there's nothing else that can be shown. In addition to that "intentionally not getting work" requires me to be actively working (for free and in violation of the the terms of dol) producing results and then abandoning those offers to collect $150 in unemployment.
How is that even a plausible assertion?
How does the impossibility of such a burden not make this process speciously arbitrary and capricious?
When you state "directly or indirectly" What does that mean / include? Are my dividends that are NOT payment for any work construed in some way into this process?
Customer: replied 2 years ago.
For clarity I meant working for the company. I was actively seeking employment as an individual , sent hundreds of resumes (I have the emails) and went on several interviews.
Expert:  Law Educator, Esq. replied 2 years ago.
Thank you for your reply.
Dividends are not considered wages, they are considered like interest payments.
Also, your assertion about working for free "in violation of the terms of the DOL" is not true when it comes to working for your own company. An owner of the company can, and many times does, work for the company without any compensation and that is not a violation of the Fair Labor Standards Act which does not apply to owners or even certain relatives of the owners.
The unemployment division needs to have proof that you are indeed unemployed and not receiving wages for work performed or that you are not intentionally unemployed and it is through no fault of your own. This is what they are seeking from your company. If you are working on the side for your own company making money, then you are not entitled to unemployment benefits and that is what unemployment is seeking proof of by contacting your company about your claim.
Customer: replied 2 years ago.
What then constitutes proof if my filings have no payroll, my taxes show no employment income, and the corporation declared no measurable profits?
Expert:  Law Educator, Esq. replied 2 years ago.
Thank you for your reply.
Your taxes and company books would show proof of no income.