Unemployment Compensation – Common Misperceptions

Losing your job can be devastating. Often, you may feel there’s nothing you can do to get by financially besides finding another job. You may have heard about ‘Unemployment Compensation’ benefits, but often, until you suffer a job loss, you rarely know whether or not you would be eligible for benefits. There are common misperceptions about these types of benefits, and often, persons who are eligible don’t even try to collect this valuable resource. Below are some, but not all, important facts you need to know about Unemployment Compensation:

1. Even if you’re fired, you may still be able to collect Unemployment Compensation. A common misperception many have about Unemployment Compensation is that if you’re fired, you cannot collect it. This is not always true. For you, the ‘claimant’, to be ineligible for Unemployment Compensation, you need to have committed ‘willful misconduct’ leading to your termination. ‘Willful misconduct’ is typically defined as “an act of wanton or willful disregard of the employer’s interests”, to put it simply. Willful misconduct is not present if you performed your job duties to the best of your ability, and it simply wasn’t good enough for your employer. Additionally, willful misconduct is not present if you made an inadvertent mistake on the job, and that mistake led to your termination. However, willful misconduct generally has occurred if you were intoxicated on the job, or you deliberately violated your employer’s rules, for example.

2. Self-Employment and Unemployment Compensation don’t usually mix. With the rise of new businesses, it is important to know that starting your own business can affect your eligibility for Unemployment Compensation benefits. Generally, you cannot collect Unemployment Compensation benefits during the time you choose to start your own business, and thus become ‘self-employed’. It is also important to understand that ineligibility for Unemployment Compensation benefits doesn’t just begin when you open your doors for business. Rather, becoming self-employed, for purposes of Unemployment Compensation, begins when you commit an act geared toward establishing your business. This act can be as simple as acquiring a business tax identification number, installing a business telephone, or advertising your business.

However, there are usually exceptions to every rule. One exception to the self-employment bar on Unemployment Compensation occurs when you are involved in a ‘sideline business’. Sideline business are defined as businesses you, the ‘claimant’, were engaged in prior to your primary job loss, you continue to operate your ‘sideline business’ as you had before (e.g. you don’t substantially increase your business), you’re still available for a full-time job, and your ‘sideline business’ is not and continues to not be your primary source of income. In other words, let’s assume you sold Avon products for approximately 10 hours per week before you lost your full-time job. You continue to sell Avon products for 10 hours per week after losing your full-time job. In this case, you can still collect Unemployment Compensation benefits regardless of this ‘sideline’ business activity, so long as the circumstances surrounding the loss of your full-time job render you eligible for Unemployment Compensation benefits as well.

3. Even if you quit your job, you may be able to collect Unemployment Compensation. Another misperception people have about Unemployment Compensation benefits is that if you quit your job, you are not eligible to receive Unemployment Compensation benefits without any exception. Although it is more difficult to prove you are entitled to these benefits if you quit, it is certainly not impossible. There are certain situations, if considered ‘necessitous and compelling’, where you can still receive these benefits. For example, if you become seriously ill and cannot perform your job duties specific to your current employment, you can still collect Unemployment Compensation provided you are able to prove your health prevents you from working at that job, your employer wouldn’t accommodate you, and you are still available for other employment. Another example would be if your employment drastically changed your job duties without your consent, by, for example, changing which shift you worked entirely or by dropping your health insurance benefits and drastically reducing your pay.

Given the above circumstances, it is always best to thoroughly consider filing for Unemployment Compensation after a job loss. Receiving these financial benefits when you need them the most can be vital to your economic survival.

This article is not intended to provide legal advice for any specific legal situation. 

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