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For the past 3 weeks, I worked part time hours for a client…

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For the past 3 weeks...
For the past 3 weeks, I worked part time hours for a client for my multi member LLC with the intention to get hired as an employee. I have 1% ownership in the LLC.Since the client billing is monthly, there has been no revenue yet. I blurred the lines between being an employee when in actuality, I have been putting in hours for my LLC which need to be reported as self employment hours, even if there were no earnings. When I realized this, I called unemployment to report the hours.Now they are asking me why I failed to report this in the first place, and I want to be sure I explain this well.Any suggestions how to reply to them? Do I need a lawyer?They also asked me if I was self-employed since I applied for unemployment benefits. I have been a member of the LLC for years, but not very active until 3 weeks ago because I am usually employed full time. There is no field for me to tell them this. Do I still say yes, even though I have not been very active until 3 weeks ago?
Submitted: 8 months ago.Category: Employment Law
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Customer reply replied 8 months ago
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call.
Customer reply replied 8 months ago
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Customer reply replied 8 months ago
Chat is fine too.
Answered in 5 hours by:
9/23/2017
Employment Lawyer: Law Educator, Esq., Attorney replied 8 months ago
Law Educator, Esq.
Category: Employment Law
Satisfied Customers: 124,424
Experience: 20+ Years of Employment Law Experience
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Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

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Employment Lawyer: Law Educator, Esq., Attorney replied 8 months ago

Unintentional reporting errors are not considered fraud, but if it caused an error in payment it can be cause for them seeking reimbursement of any over payment. Just being a member of an LLC without any income is not being employed. In fact, if you do not receive income and are working on building a new business and are not employed you were no different than owning shares in Apple, you were an investor with a passive interest in the LLC.

Yes, there is no way to tell Unemployment this until they ask you. So now you need to prove you are simply a member of the LLC, a PASSIVE or SILENT member until you actually reported to them you started working through them for ZERO income and you would need to provide financial records to support that you received no earnings.

You can use a local attorney for this, it is usually easier to make sure they present the records in a coherent manner to insure they are accepted, but it is not mandatory you do so if you can put the records together and are confident enough to be able to defend your position that you were nothing more than a shareholder (passive member) of 1% interest in the LLC and did nothing for them in the form of labor until you reported to Unemployment when you realized you started doing work but did not earn money for them. In other words, you would show that you were trying to comply, but you were in a very grey area not specifically detailed in the unemployment reporting instructions so that the ordinary person would be reasonably confused by it. This would mean that it is not a criminal matter, but still could result in you having to repay any over payments as an administrative case if they determine there was over payment.

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Customer reply replied 8 months ago
Legally, can unemployment request records of who the LLC's clients are? Can they legally request records of the P&L? Am I still considered passive, if I have been putting in an hour or two a month for a client under the LLC over the last couple years? What is the hours I put in are usually outside of normal business hours, because I was always working full time.
Customer reply replied 8 months ago
They are also asking me "Describe the nature of your self-employment (i.e. what you do)."Is this where I say: "I am a passive owner of an LLC, and I just started putting in business hours for a client doing Bookkeeping, with the intention that they that will hire me as an employee."
Employment Lawyer: Law Educator, Esq., Attorney replied 8 months ago

thank you for your reply.

yes, you need to state you are just a silent owner with passive interest in the company and you do not work for the company or receive any compensation for work for the company.

Please do not forget to leave positive feedback by clicking on the 5 stars at the top of your page, as the experts are not employees of the site and get no credit for spending time with customers unless they leave positive feedback. Thank you.

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Customer reply replied 8 months ago
Legally, can unemployment request records of who the LLC's clients are? Can they legally request records of the P&L or any other financial documents from the LLC?
Employment Lawyer: Law Educator, Esq., Attorney replied 8 months ago

Thank you for your reply.

They can request payment and accounting records to determine whether or not you received compensation for working for them.

Please do not forget to leave positive feedback by clicking on the 5 stars at the top of your page, as the experts are not employees of the site and get no credit for spending time with customers unless they leave positive feedback. Thank you.

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Customer reply replied 8 months ago
If we setup a phone call, can we walk through all of the questions that unemployment is asking me to get your advice on how I am answering them?
Employment Lawyer: Law Educator, Esq., Attorney replied 8 months ago

Thank you for your reply.

We can provide you information, not legal advice (please refer to the site terms which specifically inform you of that).

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Customer reply replied 8 months ago
If we have a phone call, would you be able to provide me information on how to best answer each question?
Employment Lawyer: Law Educator, Esq., Attorney replied 8 months ago

I could suggest options for you to decide about, I cannot tell you what to put down, as you do have to put the truth down for your answers.

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Customer reply replied 8 months ago
please call.
Employment Lawyer: Law Educator, Esq., Attorney replied 8 months ago

You need to request a call via the button on your page.

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Customer reply replied 8 months ago
I did already, and now the button is gone.
Employment Lawyer: Law Educator, Esq., Attorney replied 8 months ago

<Sigh>, it seems there is some site issue, because I am seeing no phone request for you AND I cannot send you one, the site will not let me do so. You need to send a new question, ask for me in the question, "For Law Educator Only" and then you can do it again.

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