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  1. #1
    Join Date
    Oct 2009

    Unemployment benefit reinstatement?

    What is the name of your state (only U.S. law)? IL
    On the notice of ineligibility for unemployment insurance benefits that I received in the mail, it says that I am ineligible until "having employment in at least four calendar weeks and having had earnings in each of the weeks that equal or exceed $XXX which is the current weekly benefit amount."

    Because I am out of work, a friend has offered to pay me $XXX per week in exchange for services performed for several of his small businesses. He owns a real estate company, silk screen shop, tax preparation service, and restaurant. He wants to pay me cash. If I report the income, and pay taxes on it, would it satisfy the above condition? It is likely that I would only work for him for 4-5 weeks before all the projects he wants done are completed.

    IfI work for him for 4+ weeks of wages in excess of the benefit amount, will I then be eligible for benefits when he lets me go?

  2. #2
    Join Date
    Mar 2005
    Merida, Mexico
    I think you need to be an employee to meet the UI requirements - in other words, be paid via payroll, and have your employer deduct taxes and pay UI premiums on your behalf. The situation you're describing is not an employee/employer relationship but rather an independent contractor/customer relationship - and I don't believe independent contractors are covered by UI.

  3. #3
    Join Date
    May 2009
    Abso-freakin'-lutely not. The small print of your disqualification notice would say "work for a COVERED employer and make xx amount of wages." If this gentleman wants to help you, he is going to have to put you to work for one of his businesses that pays into the unemployment tax system and work you as a covered employee for long enough to meet the re-earnings requirement. Then he would have to give you a lay off due to lack of work, in other words a no fault separation. You would submit your pay stubs to the unemployment office along with your separation notice from his business to prove that you have the re-earnings since his quarterly tax reports would not have been submitted yet and the wages will not be on file.

    This giving you a lack of work lay off as a covered employee and allowing you to draw benefits with him as the separating employer could also have repercussions to him in that his tax rate for the business could go up. He's being a real good friend to offer, but if he's only going to pay you cash under the table, or even as a contractor, it would be useless, except to provide you the income he would pay you in cash to do the work. Which really, is shady anyhow, for income tax purposes, unless you are an independent contractor, but it sure won't help you with unemployment insurance.

    Last edited by commentator; 10-26-2009 at 01:41 PM.
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