If I am reading this correctly, your husband owns a family business that employs one employee. He is also employed somewhere else, where there are occasional lay offs, seasonal or due to work flow issues.
If he is fully employed, is not by any means occupied by working for the family business such that he would not be available to go back to work for his regular employer, then he is not committing fraud by drawing benefits. If he was too busy pwning this business to go back to work at the other job, this is what would make him ineligible for unemployment.
It has NOTHING to do with how much money his company makes, or that he continues to operate this company while drawing unemployment. The only thing you cannot do while receiving unemployment benefits is work for WAGES from another covered employer (not make money from your own business) without reporting it. That he has a business that he continues to operate does not affect how much he is working for his other employer, and should not affect his unemployment.
If he were a salaried employee working for someone else instead of the owner of the business, he would have to report this income, as it would be income he made working for wages.
The claimant's income is not a factor in unemployment eligibility. As they do not consider how much money you (his wife) makes or do not make, they do not consider whether he is receiving money from other sources, is a lottery winner or a trust fund baby. When he is off from his current employer, he is available for work to exactly the same extent he has always been, and when he is called back, he will return to full time work for this same employer. So the fact that he has the family business which he oversees in his spare time does not mean he is in any way ineligible for unemployment benefits.
But your post is confusing. If the family business is the only job your husband has, what does he do, lay himself off? Please confirm or clarify so we can help you. If someone has reported that he is working at the family business and receiving unemployment, he may have already been investigated. They do, of course have the right to do this. But it doesn't sound, until you explain more fully, as if he is committing fraud.
