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how will my part-time, advance-commission based life insurance sales job effect my unemployment compensation?


I have been laid off from my full-time job and plan to collect unemployment compensation until work starts up again (it is a seasonal layoff, I work in the construction industry, here in NY). I have recently started a business (I will receive 1099's from the different products/services that I sell. I do not have a dba or tax id number) that is commission based. I can earn commissions on a variety of products and services. Most of the commissions are advanced, and are not considered to be "earned" when I receive them. They are considered a loan and are labeled as "earned" when each premium is collected. so, for example, I could meet with a client for an hour on thursday of this week. I might sell them a life insurance policy that would provide me with $500 of commission pay. that $500 would be advanced to me next week. the commission is really considered earned when the client makes the monthly premium payment. so, it is really $500 divided by 12 months, and I will have earned 1/12 of that $500 when the policy is issued (maybe 3 weeks from now) and then, 1/12 of the $500 each month thereafter, when the policy is collected. if the client cancels, or lapses, I have to give back any of the "unearned" advance money. So, what do I have to claim as income when filing my claim, and is there a minimum amount I can receive without it affecting my benefit? and is there a minimum amount of time I can work before it affects my benefit? I've tried to call the NYS DOL to get answers on this, but I can't get a live person to talk to me.


Hi Jeremy,

Let's get the "New York partial unemployment question out of the way. NY has one of the more confusing formulas. You can find that formula in the DOL pdf I link to on the page about unemployment pay (opens in new window .. in case you need to
toggle back and forth)

Given your specific "pay/loan structure" I think it is crucial that you speak and document a phone conversation with someone at the NYDOL.

While we are collecting unemployment we are suppose to report earnings in the "week earned" .. not the week we receive the earnings. I suppose this is because we usually get paid after we earn our wages .. not at the time we earn them.

But your situation presents a rather unique pay situation .. doesn't it? I will tell you right now that if you receive and report $500 dollars in one week it will cancel any benefits for that week only because it's more than the max NY benefits.

When collecting partials the best we can hope for is to make our regular WBA plus the amount a state's formula "disregards" in earnings before reducing that WBA dollar for dollar in excess of the disregarded amount.

But I have actually had conversations with other people who have been smacked with denial letters due to not reporting earnings based on commissions because they waited to report the money until it was actually "earned".

The problem was that the company was reporting the advance when it was given as wages on their unemployment tax forms. Of course the states are working overtime on detecting fraud and trust me .. they drop the hammer much quicker when there is a question that allows suspension of benefits vs. allowance of benefits.

So my advice .. contact someone live at the state no matter what lengths you have to go to ..

Find out who you are talking to and write down their answers to your questions .. because it is not uncommon to receive opposing answers from two different people at the state and documentation never hurts .. in fact it's very helpful.

Since I think your question is general in nature though you might try emailing your question to the state. There is a list of email addresses for state agencies on this page
including the unemployment department.

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Dec 22, 2009
answer from NYS DOH
by: Jeremy

I was finally able to get through to someone from the DOH regarding this question. The answer I received is as follows:

Initially, the person I spoke with said I would be considered an independent contractor with regard to my part-time sales rep position, but after she spoke with a supervisor, it was determined that I am considered self-employed in my part-time business because I receive a 1099 at the end of the year. So, when I complete my weekly certification, I need to say how many days I worked the previous week (and yes, 1 hr still equals 1 day), but I don't need to report any income I earn from my 1099 work because it is from self-employment. so...I could work 1 day, make a commission of $1000, and all I would lose is 25% of my unemployment benefit. crazy...yes, but that's what she said, so that's what I'm doing. I documented everything that I was told, along with the time, date, and the name of the woman I spoke with. I even re-asked my questions in different ways to make sure I was understood. I hope this info can help someone else down the road.

Just to verify Jeremy .. you're in New Jersey .. correct?

Did anyone say you were considered self-employed because it was insurance you're selling?

Insurance salesman and Real Estate Agents are a couple of occupations that a state MAY exclude from "covered employment".

Believe me people .. not all 1099 employees are considered "self employed".

If anyone is in doubt .. you can check the PDF provided by the USDOL by clicking the current year then "coverage"

Thanks for the update Jeremy. It is very much appreciated!!

Dec 17, 2009
Why doesn't a state make unemployment benefits easier to understand?
by: Chris

Just my thoughts on Why a state make unemployment benefits hard to understand?

If they made unemployment easier to understand .. more people would probably be able to initially collect unemployment and keep their benefits going, but trust me, there is an advantage to keeping people uninformed just enough to create the possibility of a screw up to stop their benefits.

It is my personal opiniion that it is intentionally made difficult to understand .. it protects a state's fund if they can slow the flow of funds out.

You neighboring state NJ .. has always had a high recipiency rate (the percentage of unemployed people that receive it). They currently have a pending bill to change the "misconduct definition". They want to add the word "negligence" to the definition. It may be a subtle change, but it greatly increases an employer's ability to fight performance issue based discharges, which if you didn't know is what a lot of employers do when they want to get rid of people to "downsize" instead of laying off.

The unemployment system was designed to work cyclically .. funds ebb and flow with the economy. But it is taking way to long for this economy to start flowing again.

When the jobs increase, the taxes paid by employers into the funds will increase.

Currently states are being forced to borrow money w/ interest from the feds to keep their funds solvent .. they will have to repay. So some states are doing some other things to decrease the recipiency over the long haul after a recovery.

I guess this is all they can come up with to keep an antiquated system operating, but as an "average American" with a little information about the unemployment system .. I call it trying to ride a dead horse.

Dec 17, 2009
Thank you!
by: Jeremy

Thank you for your help. I have emailed the DOL with my question, hopefully I will receive an answer soon.

I do have the option of receiving my commissions "as-earned" versus advanced. I may select this option for the time being.

Another question: If I work for 1-2 hours, is that considered a whole day? and if so, will I be penalized for it as a whole day of work? What if I generate no income during this 1-2 hours? is it still considered work?

I wish they made this easier to understand.



Now you're asking about the eligibility requirement to be "able and available for suitable work and actively seeking suitable work"

1-2 hours a week should not disqualify you for not being available for work.

You said your usual occupation is construction .. that's day work .. at least it was for my father who retired a few years ago from construction.

If you are not working at selling insurance full-time I do not see any problem for you.

Millions of people are currently "underemployed" and doing all kinds of things they would have never considered in the past.

As long as you are making the effort to actively seek work and are able and available for suitable work .. don't worry.

They don't base the benefits on how much time you work part-time in the week, but how much you earn in a week .. as long as you report what you earned .. you should be okay.

Now for a little personal ranting on my part and I'll have to post it in my own comment because it was to long for this page.

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