Unusual Temp Agency and Unemployment Benefits

by Carol

(California)

Hi Chris,

This is rather long. In June 2009, my boss placed me and 2 other employees on CA workshare unemployment. My hours were cut by 50%. After the first year, workshare was extended in June 2010 for another year. In October 2010, a friend said his company (MC) needed help and asked me to come work as a freelancer. I agreed; by that time, my hours had gone from 20/wk down to 0, and I was freelancing 10-12 hrs/wk at one place and collecting partial benefits. My boss and I discussed it and he agreed to lay me off (with a written letter) because the other 2 workers no longer submitted their worksheets (because their work hours increased for their type of work); so technically, I no longer qualified for workshare. I did not call CA EDD to let them know I was now 100% unemployed, but had found freelance work.

At MC, I was told that I would need to submit paperwork with their internal employment agency. (As I understood it, the agency would take care of my taxes so that MC could employ me without penalty from the IRS). But I was still considered an independent contractor (as the agency’s website called us).
My assignment ends at the end of the month which would make it 3.5 mos. Yesterday, the manager met with me and said they couldn’t afford to hire anyone at this time, so there was no job offer on the table. But she wanted to discuss my skills, and she asked if I’d be interested in doing the same work in the future (as a full-time employee). If so, she would put my name on a list of recommended candidates for future hires, and it would be ideal for MC because they would not have to pay the fee to “buy you out of the contract like other temp agencies” because I was a freelancer brought in by my friend, not a temp agency. I said I enjoyed freelancing; and she took it that I wasn’t interested in full-time work, but they could still use me as a freelancer. I didn’t want to say “Yes” when the truth is, because the tasks were so redundant, I was starting to doze off at my desk. We talked a bit more and the meeting ended. Afterwards, my friend asked about the meeting and I gave him a brief update. Later I noticed his supe talking with him, and I heard him say regarding me, “by her own choice”. He’s a nice guy and I don’t believe he meant any harm.

Over the past weeks, I had purposely asked how long they intended to use me so if I applied for UI after the assignment (because I couldn’t find new freelance work), it was due to MC’s termination, not mine. Now, by saying I enjoyed freelancing, it might sound like I terminated the assignment, not MC. And the manager’s statement about the buy-out made me wonder because the agency’s website didn’t mention that they lined up work for their contractors; instead the contractors “can bring the agency to their next client”. Did I just shoot myself in the foot? Would I still be able to file for UI? And since I did not call CA EDD to let them know my job status after I was laid off, is that claim still open?

Thanks Chris for your response.

Hi Carol,

I think I need some clarification for a thing or two.

After you started the freelancing(?) job, did you continue to collect partial benefits and report the earnings from the freelancing job?

And, when will your claim on the previous employment end .. or has it already ended? Although I am at present just a bit sketchy about work/share or short time compensation benefit programs .. I’ll do some research between now and then.

Then we can move on to where I think the real problem may be.

Whether they call you a freelancer or an independent contractor .. what you sound like is is an “employee” and if so, it should be covered employment .. which just means they should not only be sending in your taxes to the IRS .. but matching SSI .. etc, and also be paying unemployment tax on what they are paying you .. and therein lies the problem ..

This sounds like an employer getting ready to tell the EDD you refused work .. if they are asked .. and they will be if you file for benefits.