What you don't know about unemployment insurance could cost you
I got laid off from my job a couple of months ago, thanks to this "economic downturn" we're in, so for the first time in my life I've had to learn my way around the state's unemployment insurance program, run by the Employment Security Division (ESD).
I've learned some unpleasant lessons in that process that I'd like to share, in the hopes of helping our readers avoid making the same blunders as I have.
Lesson Number One: the Alternate Base Year
To qualify for unemployment benefits, you have to have worked a particular number of hours in the job you got laid off from in the previous year. I don't recall the exact number, but it's around 600. Thus, if you got hired late in 2008 and laid off in 2009, you may not have worked enough hours in 2008 to qualify.
However, you can file for benefits under an Alternate Base Year which doesn't correlate exactly with the calendar year. In my case, the base year for calculating whether I've worked enough hours was shifted forward one calendar quarter, to catch the hours I worked from January through March.
The Gotcha: The ESD website makes no mention whatsoever about the Alternate Base Year mechanism. So when you go to fill out the online unemployment insurance application (and why wouldn't you? Beats calling them and listening to their crackly, 80s-mix on-hold music for an hour while waiting for someone to take your application over the phone), you won't know there is such a thing. You literally cannot indicate that you want to file under an alternate base year, using the online form. If you didn't have enough hours in 2008, you'll get an automated rejection letter in the mail within a few days telling you that you're hosed. That letter, too, will mention nothing about alternate base years.
This makes absolutely no sense. Why even have an on-line application form if it doesn't offer the same set of choices as the phone-based application? Regardless, if you need this mechanism, you MUST call and tell them you need an alternate base year.
Lesson Number Two: self-employment
To receive benefits, you must log on to the ESD website every week and file a claim indicating that you did, in fact, do your best to find a job in the previous week. (You must also log and track your job-search efforts, too, but that's a well documented process that you'll learn all about if you ever need to file for unemployment benefits.)
Part of the web-form for filing your claim asks whether you engaged in any self-employment activities during the week. That is, did you earn any money on your own by hook or by crook? They ask this because if you're drawing unemployment benefits and getting money from outside sources, you're sort of double-dipping. So they reduce your weekly benefit amount to compensate.
I can understand that. But even so, this economy being what it is, why wouldn't you take an odd job if one came your way?
Who would turn down the opportunity to make a few bucks?
The Gotcha: Well, unless it was a BIG odd-job that paid a lot, any sane person would in fact have to say "sorry, I can't do your odd job." Why? Because the state, in its infinite wisdom, will reduce your weekly unemployment benefit amount by more than you earned. They don't ding your check dollar-for-dollar as would make sense, but at a far more punative ratio.
How punative? In my case, I did an odd-job for my mom's company, and earned ninety-eight dollars. Woo hoo! My reward for being honest and reporting this scrap of income to the state? That week, ESD reduced my benefit amount from $568 to $45. And no, I didn't forget to type another zero on that amount.
This makes absolutely no sense. I simply cannot understand why the state would want to discourage people to work. Why punish people for being self-motivated and taking whatever work they can find? Worse, why incentivize people to lie by not reporting the odd jobs they do take? It's ridiculous.
The lesson: don't do side-jobs while you're claiming unemployment benefits. Unless the job pays more than your weekly benefit amount, you're better off sitting on your couch watching daytime soaps.
And if you do find a big side-job, call ESD to double-check that you're not going to get yourself in some other kind of trouble if you do. Yes, you'll spend an hour on hold, but this is bureaucracy you're dealing with. It pays to play it safe.
I've learned some unpleasant lessons in that process that I'd like to share, in the hopes of helping our readers avoid making the same blunders as I have.
Lesson Number One: the Alternate Base Year
To qualify for unemployment benefits, you have to have worked a particular number of hours in the job you got laid off from in the previous year. I don't recall the exact number, but it's around 600. Thus, if you got hired late in 2008 and laid off in 2009, you may not have worked enough hours in 2008 to qualify.
However, you can file for benefits under an Alternate Base Year which doesn't correlate exactly with the calendar year. In my case, the base year for calculating whether I've worked enough hours was shifted forward one calendar quarter, to catch the hours I worked from January through March.
The Gotcha: The ESD website makes no mention whatsoever about the Alternate Base Year mechanism. So when you go to fill out the online unemployment insurance application (and why wouldn't you? Beats calling them and listening to their crackly, 80s-mix on-hold music for an hour while waiting for someone to take your application over the phone), you won't know there is such a thing. You literally cannot indicate that you want to file under an alternate base year, using the online form. If you didn't have enough hours in 2008, you'll get an automated rejection letter in the mail within a few days telling you that you're hosed. That letter, too, will mention nothing about alternate base years.
This makes absolutely no sense. Why even have an on-line application form if it doesn't offer the same set of choices as the phone-based application? Regardless, if you need this mechanism, you MUST call and tell them you need an alternate base year.
Lesson Number Two: self-employment
To receive benefits, you must log on to the ESD website every week and file a claim indicating that you did, in fact, do your best to find a job in the previous week. (You must also log and track your job-search efforts, too, but that's a well documented process that you'll learn all about if you ever need to file for unemployment benefits.)
Part of the web-form for filing your claim asks whether you engaged in any self-employment activities during the week. That is, did you earn any money on your own by hook or by crook? They ask this because if you're drawing unemployment benefits and getting money from outside sources, you're sort of double-dipping. So they reduce your weekly benefit amount to compensate.
I can understand that. But even so, this economy being what it is, why wouldn't you take an odd job if one came your way?
Who would turn down the opportunity to make a few bucks?
The Gotcha: Well, unless it was a BIG odd-job that paid a lot, any sane person would in fact have to say "sorry, I can't do your odd job." Why? Because the state, in its infinite wisdom, will reduce your weekly unemployment benefit amount by more than you earned. They don't ding your check dollar-for-dollar as would make sense, but at a far more punative ratio.
How punative? In my case, I did an odd-job for my mom's company, and earned ninety-eight dollars. Woo hoo! My reward for being honest and reporting this scrap of income to the state? That week, ESD reduced my benefit amount from $568 to $45. And no, I didn't forget to type another zero on that amount.
This makes absolutely no sense. I simply cannot understand why the state would want to discourage people to work. Why punish people for being self-motivated and taking whatever work they can find? Worse, why incentivize people to lie by not reporting the odd jobs they do take? It's ridiculous.
The lesson: don't do side-jobs while you're claiming unemployment benefits. Unless the job pays more than your weekly benefit amount, you're better off sitting on your couch watching daytime soaps.
And if you do find a big side-job, call ESD to double-check that you're not going to get yourself in some other kind of trouble if you do. Yes, you'll spend an hour on hold, but this is bureaucracy you're dealing with. It pays to play it safe.
# Posted by Jason Black : 10:19 AM
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