Search This Site.

Part time Independent Contract work - How does it affect UI received from FT job

by Jerry
(New Jersey)

I am about to be laid off from my full time job due to a downsizing, likely within 30 days. I would like to begin working part time as an independent contractor for one or more app based employers (Uber, UberEats, Doordash, Amazon Flex, etc) before being laid off. How would this type of part time work affect unemployment benefit eligibility? I think it's the fact that I would be considered an independent contractor that has me worried about eligibility.

Hi Jerry,

I think you're right to be concerned if independent contract work means to you what it does to me. Any sort of self employment efforts, may affect your right to collect benefits after being laid off for a "lack of work", which in essence means the employer confirms the discharge was for a lack of work and no fault of the employee.

I can't say I know where to direct you to, to find a specific NJ regulation that would provide better guidance for you to follow, but when I was in the same boat here in Colorado it was the regulation that basically said benefits shouldn't be denied, if the claimant is able to prove they worked as an employee and earned money from being self employed concurrently. It's why before I ever attempted to earn a dime from this website .. I decided to voluntarily stop claiming weekly benefits in 2009.

When someone begins earning money from say a part-time job, while they continue to file each weekly claim, after being initially approved for benefits due to a lack of work, the concern would only be that they report earnings, in the week earned (not the week paid) and let the unemployment department do it's thing to calculate if they may still be entitled to a partial benefit amount.

But when a state learns a claimant is earning money from working as an independent contractor (to me this would be conditioned upon not having an "employer" who takes out all the regular withholding taxes, or paying UI taxes on the
person's wage) additional conditional eligibility issues are often raised on a claim .. because someone reported self employment earnings (which I also advise anyone to do to avoid another issue, having to do with intentionally withholding info in an effort to obtain benefits fraudulently). Not that I think you would, but because I never know what someone might be thinking.

My primary concern is about issues raised that ask if the claimant is able and available to accept a job, drawn into doubt because they are forthcoming about the pursuit of self employment. Once a state knows that, it may lead to additional eligibility interviews .. and other questions, such as to whether the claimant is, or may not be complying with the necessary job search required by most all unemployment laws.

So, in closing even under the best of circumstances, such as when a state's laws, or regs allow for payment of benefits when someone has earned money from self employment endeavors concurrently while holding down a full time at-will job, my advice once unemployed, is to always .. always log your job search, so you can also prove compliance, just in case the UI department chooses you, when it conducts "random job search audit" to comply with what is required of it by the U.S. DOLETA.

One other thing to consider, is whether any of those independent contractor jobs, would actually be considered a job covered by unemployment insurance.

As happened to many during the recession who were laid off, they opened a claim immediately after being laid off, but they also accepted a job that wasn't actually suitable work for reasons most employees without a job can imagine.

But, since continuing unemployment benefits eligibility, after being approved for something such as a layoff, usually requires the state to looks to the cause of separations subsequent to why someone first became unemployed and opened a claim for .. benefits become deniable when they quit a job they accepted .. even if they found out after working just a day, the job wasn't for them.

Click here to post comments

Tell us your unemployment story! It's easy to do. How? Simply click here to return to Employees Working Smarter.

} }