Friday, April 6, 2012

What is My Base Year Under Pennsylvania's Unemployment Law?

Suppose the Notice of Financial Determination I Receive From the Pennsylvania Unemployment Service Center is Wrong, Incorrect or Miscalculated? Can I Appeal?  Are There Pennsylvania Lawyers Who Help People Applying For Unemployment?  

When someone applies for unemployment, the first thing the Pennsylvania Service Center does is calculate the amount of earnings reported for the claimant (i.e. all w-2 earnings you received) during what is referred to as their "base year."  These earnings are then divided by roughly 52 (weeks), and then the claimant's weekly benefit rate is established.

This calculation ii then sent to the claimant (usually within 2 weeks or so of his/her application) via a document called a "Notice of Financial Determination."

If You Do Not Have Enough Base Year Earnings to Qualify for Pennsylvania Unemployment Benefits, It May be the Result of You Having Been Misclassified as a Self-Employed Independent Contractor

Many companies purposefully hire individuals and characterize them as being self-employed independent contractors compensated on a 1099 basis, when in fact they are under the law actually employees who should be paid on a w-2 basis. When this happens, the employer does not report any wages to the Pennsylvania Department of Labor, which results in the individual being denied benefits due to a lack of earnings.

Seek Counsel and Appeal Notice of Financial Determination

If you have been misclassified, you can still win unemployment compensation in Pennsylvania if you can prove that, despite the fact that you were deemed an independent contractor, you in fact were actually an employee as defined under the law.

If the Notice of Financial Determination is wrong, you have to file an appeal withing 15 days of the day it was mailed.  If you do that, you will soon after be scheduled for a Hearing before an Unemployment Referee. All workers are presumed to be w-2 employees under Pennsylvania law, ao at an Unemployment Referee Hearing, the company has the burden of proof to prove that you were not an employee, but were instead a self-employed independent contractor.

Understanding Burden of Proof and Rules
of Evidence Critical to Victory
How Does Pennsylvania Unemployment Calculate My Base Year of Wages?  Philadelphia Area Lawyer Who Represents Workers Who Have Been Fired, Laid Off or Quit With Their Unemployment Claims 

Under Pennsylvania Unemployment Law, an applicant's Base Year is the first 4 of the last 5 quarters that immediately preceded the date of your separation from your most recent employment.  So, the unemployment people check their records for all earnings reported for you (i.e. all w-2 earnings you received) during the one year period ending 3 months before the date of your application.

EXAMPLE:  If you file an application for benefits on April 1, 2014, your base year would be January 1, 2013 through December 31, 2013 (remember, the 3 months immediately preceding your separation from work are excluded from the base year calculation).

How Long Do I Have to Work For a Company to Get Unemployment in Pennsylvania Based on What That Company Was Paying Me? Law Firm in Chester County That Helps Employees Win Pennsylvania Unemployment Claims 

At least 13 weeks, and maybe more depending upon how much you earn each week.  Allow me to explain via a relatively common hypothetical.

Assume that you worked for a Old Company for 3 years during which you earned $400 a week (i.e. around $21k per year).  Unfortunately, Old Company laid you off on September 30, 2013.

You apply for unemployment. Since you were laid off and earning $400 per week (you were continuously employed by Old Company during the 3 immediately preceding years, so this is a simple equation), you are deemed eligible for unemployment.  You start receiving about $200 per week (which is roughly the amount of weekly benefits you get in Pennsylvania when you lose a job paying you $21k per year).

Abacus May Be Required
On January 1, 2014, you find a new job with New Company paying you w-2 wages in the amount of $800 per week (i.e. about $42k a year). You get off of unemployment.

Unfortunately, New Company lets you go as part of a lay-off on March 31, 2014, 2014 (i.e. 12 weeks after you started with New Company).

You then apply for unemployment in connection with your involuntary lay off from New Company. You are hoping to get around $400 a week in benefits (which is what you get when you earn around $42k a week), because that is what you had been making with New Company.

Unfortunately, your Base Year calculation will include only what you earned from Old Company during 2013 (your first quarter earnings from New Company during 2014 are excluded).  To make matters worse, since you only worked for Old Company for 9 months in 2013, your annual earnings for purposes of calculating your Base Year are only around $15,600, which means your weekly benefit rate will be around $150.

"I was assured there'd be no math."
So, that is how Base Year earnings are calculated....

What if Pennsylvania's Unemployment People Do Not Include My Earnings From Work Because I Was an Independent Contractor?  W-2 Employment Versus 1099 Employment - Independent Contractor - Self-Employment Lawyer

If you worked for a company and were paid 1099 wages, that means that you were were classified as self-employed by the company, and therefore it have not reported any wages for you to Pennsylvania's Department of Labor.

So, if you worked for a company for a while and are told when you applied for unemployment that it had $0 earnings reported for you, that is likely why.

Many people are misclassified as "self-employed" when in fact they are what is known as "common law employees." We win such cases all of the time.

If you believe you were misclassified, appeal from the Notice of Financial Determination and explain your case to the Referee at the Hearing.  You may want to consider hiring counsel for such a Hearing, because it can be complicated!

Philadelphia Area Unemployment Lawyer

John A. Gallagher, Esquire -
NOT a Math Wizard1
Philadelphia Are Employment Attorney Representing Employees

John A. Gallagher is an employment lawyer who represents employees in Pennsylvania. 

John typically represents employees who need an employment lawyer in Philadelphia County, Chester County, Delaware County, Bucks County, Berks County, Lancaster County and Montgomery County.

Pennsylvania Employment Attorney Provides Free Telephone Consultations

If you are looking for an employment lawyer, and live in Malvern, Wayne, King of Prussia, Downingtown, Glenside, Doylestown, Radnor, Newtown Square, Exton, Philadelphia, West Chester, Skippack, Langhorne, Haverford, Nether Providence, Broomall, Drexel Hill, Reading or any of their surrounding towns, feel free to send me an e-mail or give me a call.  I am always glad to spend some time with people via a free telephone consultation.

Need an Employment Labor Lawyer Near Philadelphia?

Click Here if you have questions about any aspect of employment law, from wrongful termination, to wage and overtime claims, to discrimination and retaliation laws, to Family and Medical Leave

Click Here if you have questions about any aspect of Pennsylvania Unemployment Law, from willful misconduct, to voluntary quit, to Referee Hearings, to severance issues

Click Here to e-mail John directly.

Thanks for checking in with us.


Anonymous said...

someone told me that there is a new requirement for unemployment. In order to even be eligible for benefits you must have 49% of your highest quarter in one of the other three quarters. is this correct

Anonymous said...

someone told me that there is a new requirement for unemployment. In order to even be eligible for benefits you must have 49% of your highest quarter in one of the other three quarters. is this correct

Jeff said...

Yeah they are trying to deny me benefits based on the 49.5% right now. I had a big commission bonus in Q1 2016 and so my 2015 Q2-Q4 wages were actually slightly lower than my 2016 Q1. So, even though I've worked full time for years and paying into the system they are essentially trying to punish me for having a single great quarter - and it was commission so it's nothing that I could count on.

Heather said...

Hello,I started my job April 11,2016. They laid me off September 27,2016. My hourly rate was $15 an hour and I live in Pa. Will I be able to collect?

Heather said...

Hello,I started my job April 11,2016. They laid me off September 27,2016. My hourly rate was $15 an hour and I live in Pa. Will I be able to collect?