Does having an LLC prior to getting laid off affect unemployment?
January 26, 2010 9:59 AM   Subscribe

Does having an LLC prior to getting laid off affect unemployment?

I live in New York. I've formed an LLC last summer to start doing some freelance design work on the side. The idea of starting an LLC is to get a business started so I can eventually work for myself. Unfortunately, I was laid off before I am ready to make the leap to operate my own business.

I know that you are not allow to form an LLC while collecting unemployment. But the LLC was already formed before I was laid off. I can't seem to find any documentation of this situation on NYS DOL's web site.

Can anyone give me some advice or reference material that I can read up on. Thanks.
posted by flxyp to Work & Money (2 answers total) 2 users marked this as a favorite
Unemployment insurance is based on the length your full-time employment. Whether you do freelance work on the side does not matter as long as your full-time job is reporting you as a salaried employee.

I have a sole proprietorship and an empty (meaning I have yet to process any income through it) New York State S Corporation and neither one of them affected my unemployment insurance, because the company I was laid off from in NYC counted me as a salaried employee, working 40 hrs/week on which both my employer and I paid State taxes on.

However, freelance work does affect your unemployment insurance after you are laid off.
posted by camworld at 10:29 AM on January 26, 2010

It is my understanding that as far as you don't collect wages from your LLC you are fine.
posted by 3dd at 12:47 PM on January 26, 2010

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