Unemployment Benefit Tips

Tips To Collect Unemployment Benefits

Have New LLC with no income Just got laid of from FT job. Can I collect in OK?

I just started an LLC a couple of weeks ago and I just got the call today from my full time job that I’m getting laid off. If my business hasn’t made any money as of yet and my only source of income was my full time job am I going to be eligible to collect unemployment?

Should I put the LLC 100% in my wife’s name to be able to feed the family until I can get this business going or find a full time job? I’m confused and concerned about this issue. I find it hard to believe I can’t get unemployment if my company hasn’t even cut me a check or made any money!

Thanks!!!

Chris’s Response

This issue of self-employment and it’s potential for earnings, or just having a inactive business varies by state.

It can depend on details such as, when you started the business, and a state, that may have set a precedent that shows a history of running a business concurrently with a full-time job is why you are deemed able and available for work. A new business though, well that takes a bit of time doesn’t it?

Self employment can affect freelancers, like those who write for others once in a while but mostly on their own blog in hopes of making a living. It just depends on what state we’re talkin’ bout and then, we’ll still have to hope it’s a state that has a good resource to check out other than the UI laws.

The issue isn’t just unemployment fraud, like when someone going into business doesn’t report .. maybe a sales commission earned by a self employed independent sales rep that turns out to be really an employee whose employer is trying to skirt the additional expenses of needing employees.

When a person is on the up and up, reporting earnings from their own business might wipe out any partial unemployment benefit and if that happens it may throw a flag and if that happens, it’s not a stretch to think they might have their benefits suspended pending an investigation and wind up having to explain to a friendly unemployment claims adjudicator why they should believe you’re still able and available and looking for a “job” of the UI covered variety when you actually have your own business to work in.

If you don’t report earnings from your new company and just collect the benefits .. I would be afraid the UI dept. might also be cross checking other state, or federal databases and end up detecting something that leads them to believe you committed unemployment fraud .. down the road a quarter, or two.

If it were me, I think I would put the LLC in my spouses name because that is a legal thing you can do, to protect yourself from becoming suspect .. unless it would somehow negatively impact her.

Who knows, maybe my “spouse” might actually make a go of the business quickly because of all the free help they got from me during my unemployed spare time.

You know .. the time left over after meeting all the job search and other requirements of the re-employment half of the UI department, going to interviews for suitable jobs, knowing which jobs aren’t suitable, preferably before the interview is over .. etc., etc.

When Unemployment-Tips became my business .. I did not allow it to happen until I got the monkey off my back when I stopped filing for weekly benefits

Anyway, I only received them because I certified each week I had answered all the questions truthfully .. under penalties of perjuries.

I had a hard time explaining to my own spouse why I wouldn’t be able to pull down the weekly bennies I had left anymore, but when I explain to him about overpayments he got it.

Want to tell me what state you’re in? Maybe I could find a better resource that helps explain how starting and running a business while receiving unemployment benefits in the state works.

Chris

Comments for Have New LLC with no income Just got laid of from FT job. Can I collect in OK?

Average Rating starstarstarstarstar
Jun 21, 2017
Rating
starstarstarstarstar		 Ohio girl

by: Anonymous


I am in Ohio. My job will be eliminated from my departmwnt and they “offered” a job title that is different in work and nature and below my experience levels bc they say I am good at it and have been jumping as a team member to help with poor management and understaffing for a year.
I also recently began a start up business…have not even filed for the llc so the advise to register it in my spouse’s name is helpful.
I am collecting my old duties and any pertinent emails as I am certain they offered me the lesser position knowing I would go. I have stellar reviews but am not willing stay because of this management.
Thoughts on my filing in Ohio? With the new business in development?
Jr

Hi,

Please check the Q&As out about accepting, or refusing suitable work, not that I would ever feel comfortable making the call, without first exploring all that criteria .. one by one, by myself to make that call for another.

But I do think you need to, so you can determine for yourself, if the offer might be insufficient to refuse, or what to focus on when you speak to the OJDFS and explain what made it a substantial change to the terms and conditions of your employment, therefore, unsuitable work for you .. specifically.

Chris

Oct 26, 2018
Rating
starstarstarstarstar		 Laid off with LLC

by: Ben


I just got laid off after 3 years full time in South Carolina. 1.5 years ago, my wife’s status went from full time to contract (due to her job going downhill). So she and I started an LLC, with 50/50 ownership. I still had my ft job, she still did her job, just under the LLC name. All income from LLC was/is from her work. My involvement in the LLC was was 1% at best. Am I eligible for unemployment benefits still? My ft job was 80% of our income. Also, how can I receive your answer?

Oct 27, 2018
Rating
starstarstarstarstar		 Ben

by: Chris – Unemployment-Tips.com


Hi Ben,

When someone submits a comment under one of the Q&As pages, I get an email notification, then I read the comment. When/if I respond, I know more often than not, individual questions may sound close to the one found at the top of the page .. but answers about unemployment, are often, very specific and potentially different from one person to another .. depending on the state and circumstances.

However your claim is a SC unemployment claim. And I have a problem, since I know why it’s SC rules that disallow me from offering UI appeal case referrals to those in SC.

May I suggest the general contact form, to which I’ll respond with a phone number, should you want to learn more about conditional eligibility issues, your question raised for me, and with specific regard to that LLC .. just so I can avoid typing .. since it aggravates my hands.

Jul 25, 2019
Rating
starstarstarstarstar		 Sticky situation

by: Anonymous


If a LLC registered company has 3 owners but 2 team up and fire the 3rd, can the 3rd then collect unemployment? #1 & #2 work mainly in the offices & #3 is a hands on chef at 3 company locations. His only income came from the hours he put in working in the kitchens. #1 & #2 had all locks changed so #3 can’t get into any of the co-owned locations. Now with no income from a business he partially owns and a family to support I’m just wondering what rights he still has in MN for financial help immediately?

Hi,

To address your question, I know unemployment benefits when possible for a business owner, is dependent on whether the state has created an exception to the general rule that business owner wages paid to self, are not covered by unemployment insurance.

Any answer for me would begin by checking out the “coverage” chartbook at the USDOL UI Comparison Charts. I link to the charts on the “laws” page.

However, I have some thoughts since you shared you are a part owner of a company and have other income coming to you .. other than the wages you were paid to be the chef and say you fired for some reason, as if you were any other at-will employee, in lieu of being got rid of, by being bought out by the other two upset LLC owners.

This sounds a little sketchy to me .. or you made a real bad deal when you went into this business.

I think what you really need Sticky, is a lawyer .. not just a non-attorney specialist in unemployment insurance benefits, who is telling you the first thing you should do is checkout the coverage charts .. just to know if you might have been intentionally misclassified as a part owner of an LLC, by someone who may of thought it a good idea to avoid paying unemployment taxes on the wages paid to a chef running three locations.

Yup .. it’s sticky, but it sounds to me like it already was when you came on board as a part owner of the LLC you may of had no interest in .. other than being an employee.

Chris
PS Being laid off and being fired are both being discharged by the employer.

The difference between being laid off and fired .. is one is for a verified lack of work when the employer tells an unemployment dept that was the reason .. where being fired for something not verified by the UI dept as a “lack of work”, is usually claimed by an employer to be misconduct.