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John
John, Employment Lawyer
Category: Employment Law
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Experience:  Exclusively practice labor and employment law.
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I was employed by a W-2 employer and was off. I always have

Customer Question

I was employed by a W-2 employer and was laid off.
I always have had (and continue to) have 1099-Misc income in addition to this W-2 income.
I have filed for unemployment and have received some benefits, however, I am confused about how my benefit is being calculated.
1.) Since I lost W-2 income should my 1099-Misc income be considered?
2.) Since I lost a W-2 position should my status as an independent contractor matter?
3.) I received a letter from Unemployment that the 1099 wages "are not covered for Unemployment purposes as you were considered an independent contractor, therefore no wages from that employer have been assigned". Does that mean anything more than I didn't pay into Unemployment from the 1099 employer so I get nothing out?
4.) Bot***** *****ne-it seems like I'm not deriving the full benefit and the 1099 income is hurting me ESPECIALLY SINCE THAT INCOME IS NOT A TRUE FIGURE BECAUSE AT THE END OF THE YEAR I FILE A PROFIT AND LOSS. Last year I had a $399 loss. What should I do?
5.) I am paid once a month by the 1099 employer. Should I be reporting this income as it's EARNED (that's what I've been doing) or when it is PAID?
6.) How long does unemployment last?
7.) And if it is (for example 26 weeks) is that TOTAL WEEKS or PAID weeks? (Some weeks I get nothing)
Submitted: 1 year ago.
Category: Employment Law
Expert:  John replied 1 year ago.

Good question. I'll answer your parts 1-5 as one since they are interrelated. Your income in the form of 1099 contractor income is not considered by unemployment for the purpose of establishing your base period ( the wages in the earliest four of the five complete calendar quarters before you filed your benefits claim), which base period wages are used to determine your eligibility for, and amount of unemployment compensation. This is because it is not taxed to that extent. When you are a W-2 employee the employer specifically pays to the unemployment agency a tax that covers the employer for unemployment claims. The same is not occur in the case of the contractor. BUT for your purpose of qualifying for unemployment you do have to report as remuneration the income you get as a contractor. In theory, you are supposed to report that weekly as the income becomes "earned", but the agency really has no method of determining when it is "earned"; they can only track when you receive it...hence the answer to your question about monthly payments and deductions...you can in reality report that you do not have remuneration for the first 3 weeks of a month then declare on the last week that you had remuneration (though technically you are supposed to break that down weekly). Further, the unemployment law does not have a provision in it for deductions (business or otherwise) when declaring remuneration, so the opinion I have on that at this point (until someone challenges this in a court someday) is that you cannot take them. Bot***** *****ne - your eligibility for and weekly benefit amount will be determined from your W2 income, you will probably qualify for some amount of weekly benefit. After you qualify, when you do your weekly remuneration and work search report you will have to declare the 1099 income but you should qualify for at least 3 weeks of each month because you can in reality attribute that remuneration to the week you get it. So your final week of each month's benefit payment may be reduced or disqualified if the 1099 income for the month - it is reduced dollar for dollar if it equals or is greater than 30% of your weekly benefit and eliminated if it is greater than your weekly benefit.

Six - it's generally twenty six weeks as long as you have had 18 consecutive weeks of wage with w-2 employer earning at least $116 per week.

Seven - For all purposes it is is total weeks. Every week in that 26-week period that you do not report work or remuneration, you are thrown off claim and have to reapply for benefits. So if your plan was to assign all you 1099 income for the last week of each month and just not report that week to avoid losing or reducing it, you aren't going to be able to do that...you'll get thrown off you claim each month and have to re-apply - the problem being with this (not only the administrative burden on you) is that you are moving too far away from your base period to qualify for unemployment; after the 12th week you could no longer claim your base period. So if you are going to be out of work for this amount or longer in your anticipation I would not recommend doing that. Plus each time you file a new claim there is a one week wait period...so you delay a week of benefit payment when you do that.

Customer: replied 1 year ago.
Please let me clarify your response to #7: "Every week in that 26 week period that you DO NOT REPORT WORK OR REMUNERATION etc.".
Do you mean I FILED NO CLAIM
or
that I FILED A CLAIM and reported NO WORK OR REMUNERATION?
I have filed every week since September so I have not been thrown off claim.
Also, if this has any bearing on your response to #6/#7-I worked for the W-2 company for 5 years earning over $116 a week.
I am sorry I am having a hard time understanding. Can you make any suggestions how to maximize my benefit now that I have hopefully clarified a bit for you? Thanks.
Expert:  John replied 1 year ago.

When you are on claim you have file your job search activity and remuneration approximately every week. If you do not make this report each week you will be thrown off.

The only way to maximize your benefit at this point would be to not have other income. But you need to weigh that against losing a week of benefits each month. If this 1099 income is significantly more (double or more) than your weekly benefit amount, then it is not worth giving the income up in my opinion...I'd just lose that week of benefits if it were me.

Expert:  John replied 1 year ago.

I believe this answers your question. However, if you need clarification or have follow-up questions regarding this matter, I will be happy to continue our conversation – simply reply to this answer. If you are otherwise satisfied with my response, please leave a positive rating as itis the only way I am able to get credit for my answers. Thank you, ***** ***** wish you all the best with this matter.

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