Thursday, March 7, 2013

Pennsylvania Unemployment Law: Taking Part-Time Work as an Independent Contractor

If You Take a 1099 Independent Contractor Job While on Pennsylvania Unemployment, You Will be Disqualified From Receiving Further Benefits

You are receiving $500 per week in Pennsylvania Unemployment Benefits and have been offered part-time work as an independent contractor, paying you $200 per week.  You understand that if you earn 40% or less of your weekly Unemployment Benefit rate doing part-time work, your Unemployment Benefits will not be affected.

You take the job and over the next 3 months, you faithfully report your $200 per week of earnings to Unemployment.  You continue to receive your $500 per week in Unemployment Benefits.
Suddenly, you are informed that you are disqualified from future Unemployment Benefits. You are told further that you engaged in fraud, and must pay back all of the Unemployment Benefits you received over the past 3 months, with penalties.

What on God's Green Earth has happened?

You Can Take Part-Time Work at as a W-2 Employee and Continue to Get Pennsylvania Unemployment Benefits, but You Cannot Take the Same Job as an Independent Contractor or You Will be Deemed Ineligible for Unemployment 

The Unemployment Service Center reviewed your account and determined that you had no reported earnings over the past 3 months (only w-2 earnings are reported to the government; 1099 earnings are not).  It deduced therefore that you had been working as an independent contractor.  It concluded that you engaged in fraud because, although you did report your earnings, you failed to advise it that you were working as an independent contractor, an automatically disqualifying event where Unemployment Benefits are concerned.  
Signing an Independent Contractor Agreement Could Lead to
Loss of Unemployment Compensation Benefits in Pennsylvania

Do not be unduly alarmed.  Appeal the overpayment determination promptly, simply stating "I disagree with the determination."  Then, seek out counsel to assist you.  If you can prove at an Unemployment Hearing that, notwithstanding the independent contractor agreement you signed,   you were actually an employee, or that your are not "self-employed," your right to benefits can be restored.

Philadelphia Area Employment Attorney Representing Employees

Representing Pennsylvania Workers Since 1991
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.

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1 comment:

Anonymous said...

Oh my gosh. This is EXACTLY what happened to me, and I had my appeal hearing almost 2 weeks ago (tomorrow will be 2 weeks.) Still waiting for my decision, the clerk said it is pending. Is this bad news? This whole thing is so crazy and so blown out of proportion, I have no idea how they can say that it was fraud and ask for repayment of wages, and we're talking a LOT of money.