Unpaid founder of defunct co seeks unemployment in CA

June 29, 2010 6:58 AM

I am in California and the startup I founded is bust. I want to know how to make the best case for my eligibility for unemployment benefits. Complicating factor: I took no salary from my startup, only stock. My last regular job prior to this startup fiasco was in Fall 2007.

This is a followup to an earlier anon post.

I have been applying for jobs, but so far, no takers.

Questions:

1. can I make a good case to CA that I should be on unemployment?
2. should I list my non-paying job as 'employment' or should I cite my last paying job from 2007 as my previous employer?
3. do I have a snowball's chance at succeeding, avoiding the Kafka-esque scenario where I'm looking for work, not employed, but also not unemployed?
4. any other support or services I should be aware of?

throwaway email: [e-mail]

posted by anonymous to Work & Money (5 answers total)

It seems that the responses to your previous post indicate that you are ineligible for unemployment compensation because your company had not paid unemployment taxes to California.

If it is correct that you did not pay those taxes, then you likely cannot make a case for being on unemployment.
posted by dfriedman at 7:04 AM on June 29, 2010

Yeah, you're probably SOL here. If your previous venture didn't pay unemployment taxes, you aren't going to be eligible. Many startups work this way. It's one of the risks of working at a startup.
posted by valkyryn at 7:23 AM on June 29, 2010

Not an employment lawyer, or in CA; but in my state; if you didn't pay unemployment taxes, you can't get unemployment benefits. However, CA is a crazy place with all sorts of unusual rules. You might want to get a referral from your local Bar Association for a consult with an employment lawyer.
posted by SecretAgentSockpuppet at 7:34 AM on June 29, 2010

The official California FAQ on unemployment eligibility makes several things clear:

1. Your benefits are based on your earnings in the twelve-month period starting 15-17 months before filing for unemployment. Since you didn't earn anything during that period of time, you're out of luck.
2. Even if that weren't the case, "[s]elf-employment does not usually qualify for UI benefits coverage."
3. If you still want to file, even though your claim will almost certainly be rejected, you should contact the California EDD to find out if you're eligible.

posted by cerebus19 at 7:43 AM on June 29, 2010

Having gone through the CA EDD process late last year, I can tell you that if your claim isn't air-tight (and thus can essentially be approved by an automated process, versus requiring human review which it sounds like your claim would need at the very minimum) it will take you at least 6 months to see any benefits at all. I didn't even get an appeal hearing for six months after I requested it... I can't even imagine what I would have done had I not had a family to rely on.
posted by speedgraphic at 10:31 AM on June 29, 2010