FileUnemployment

Self-Employment and Unemployment Insurance

Updated : June 11th, 2019

The Story of Lisa Parker

Lisa Parker, a budding dot com entrepreneur in her late thirties runs a small company that deals with web development and maintenance for local enterprises in Detroit, MI. Her husband works as a marine engineer employed with a shipping conglomerate. Lisa has two kids who are in high school.

Lisa’s firm, Web Success is registered as sole proprietorship with the local authorities and she pays mandatory taxes into the Michigan Department of Treasury. She has carefully nurtured her business meeting timely expectations of various needs of her clients winning laurels and referrals. In her path to success, Lisa has provided employment to five individuals who assist her with their expertise in content development, web designing etc.

Due to the slow onslaught of economic crisis since 2010 that engulfed the city of Detroit, Lisa gradually lost business from local clients who were themselves victim of this crunch. Many of her clients filed for bankruptcy which resulted in deferred revenue for Lisa as they could not afford to pay her. Web Success was able to sustain for close to two years, thanks to the cash balance and other investments Lisa made which aided continuity of her enterprise and timely payment of salaries.

Web Success had meticulously planned their fall in the second calendar quarter of 2013 as they were no longer getting any deals from existing clients nor were able to sign up any new ones. Lisa decided to call it a day and laid off all her 5 staff members with a severance pay for 6 months. She was left with nothing in her bank after she shut down her business and started looking for employment opportunities outside Michigan.

While she was working hard to find a suitable job, she decided to apply for unemployment insurance benefits provided by the labor department in MI for those who are looking for a job but are currently out of one. Unfortunately, her application was rejected as she was self-employed and did not pay unemployment taxes into the system.

Unemployment Insurance for Self Employed

If you were  self employed  and are currently out of work because of no fault of your own, your chances of receiving unemployment benefits are not that high. However, you should check with your state unemployment office to check your eligibility, as there are some situations in which you would be able to get jobless benefits even if you were self-employed. The labor department in your state will be the best authority to clear the air for you.

Do Not Loose Hope
Do Not Loose Hope

In a few cases that can be considered an exception,there can be light at the end of the tunnel. Please read below to find out more.

When can self-employed workers receive unemployment benefits?

  • Talk to your state unemployment office to find out if you were wrongly classified as self-employed. Long term contractors are classified as employees in some states that make you eligible for UI benefits.
  • Apply for benefits if your business is incorporated and you can’t find work. You should be eligible as long as the corporation paid unemployment insurance.
  • Apply to your state unemployment office if you are not working and you live in a region affected by a disaster. If you lost your employment because of a disaster, you should be eligible to receive disaster unemployment assistance even if you are self-employed.
  • If you are an ex-military service member who was self-employed before entering the service, apply at the state office of the state you reside in after leaving the service, regardless of where you lived before.
  • Talk to your state labor office if you have started your own company since being laid off. Under a special program, you may be eligible for a self-employment allowance while you are establishing your business.

If you’re unemployed and are looking forward to applying for benefits, always consider applying for it before concluding if you will/not qualify.

We hope this article was helpful. Join our community discussion board to discuss more on this and other unemployment topics.

Note: The character of Lisa Parker is a fictional creation by the author out of his experience working on various fora on this website interacting with people. Any resemblance to a living/dead person is purely coincidental.

 

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  1. I work for a church pre school program and I have lost my job due to coronavirus. When I applied for unemployment in Texas it says that two does not except this employer as my last employer. I’ve been working there for 13 years. What do I do?

  2. Chad ….. how do I get thru when it wont accept my ID or my password. I change it 5 times and it still wont work. Calling is not working at any time when I spend and whole day calling back to back to get thru. why don’t they just help or force the employers ( company) to place they claims in for their workers like GM did……I NEED HELP…PLEASE.

    1. Chad,

      We understand this might be a difficult time for you. We’re anticipating a shortage of staff across unemployment offices due to the massive surge in UI applications considering the pandemic. We advise against calling or visiting the office, as you may not get a response instantly.

      Your state may have activated “Extended Benefits (EB)” authorized by the federal government. We recommend you apply for UI benefits online. For more information, please visit your state’s official Unemployment website.

  3. i live in ga…all the day cares have shut down my wife and i have full time jobs,,,but i have to leave my company which i have been there for over two years,to take care of our child….can i still collect unemployment…this covid virus is why i have to leave my job…

    1. Gary,

      We understand this might be a difficult time for you. We’re anticipating a shortage of staff across unemployment offices due to the massive surge in UI applications considering the pandemic. We advise against calling or visiting the office, as you may not get a response instantly.

      Your state may have activated “Extended Benefits (EB)” authorized by the federal government. We recommend you apply for UI benefits online. For more information, please visit your state’s official Unemployment website.

  4. are you kidding me my son lost his job on 10/17/2020 hes mentally challenged and cant file on his own because he doesn’t know how so I started going to sites trying to file for him and the residence inn Marriott promised to help him and have done zip . ive tried 10 different sites and I keep getting dropped wen I complete forms and push submit. 12 days now n still cant file a claim.

    1. Martin,

      There’s only one website you should be trying from. Please let us know your state and we’ll share the website information.

  5. I have submitted my forms EXACTLY as I was instructed too on line. Even though I have filled out the paperwork correctly I keep getting emails asking for me to fill out the form that I have done multiple times already. Remuneration – Claimant Questionnaire is the issue. I got online and requested a phone call. 3 days ago. I just need to know that you guys received everything and I don’t owe any more information.
    Nobody answers the 617-626-6800 number. Just get directed to the internet. Well, you can’t speak with the internet. I am getting mixed messages and I fret that this will delay any benefits.
    Could someone please give me a call.

    1. James,

      Please try finding answers online since there might be limited phone support due to the shortage of staffing. This is a private forum and we’ll not be able to arrange a callback.

  6. I work for a church that has grown it’s congregation over almost 40 years and we now have 26 mostly full time employees, most being here many years. Will our employees be able to file and receive benefits since we are an EXEMPT from paying unemployment industry? State of Florida

  7. My unemployment benefits ran out 3/1/2020 am I able to file for extended benefits ? I live in California and am 62 years old.

    1. Ariana,

      We understand this might be a difficult time for you. We’re anticipating a shortage of staff across unemployment offices due to the massive surge in UI applications considering the pandemic. We advise against calling or visiting the office, as you may not get a response instantly.

      Your state may have activated “Extended Benefits (EB)” authorized by the federal government. We recommend you apply for UI benefits online. For more information, please visit your state’s official Unemployment website.

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