Laid off and freelancing
July 18, 2016 6:13 PM   Subscribe

I was recently laid off. I am searching for a new permanent gig, but in the meantime I would like to try to earn some extra money by freelancing. I want to understand the implications of this and make sure that I am not overlooking anything that I need to consider.

First of all, I am in Ontario. I have applied for EI but I haven't received anything yet.

I was laid off from my job in IT about a month ago. Since then, I have been very actively searching for work and have had a couple of interviews, but no offers yet.

I want to try to earn some money freelancing while I continue to look for a new job. I don't see this as becoming a full-time thing—just a way to earn a bit of extra money until something more stable comes along, and to have something on my resume / LinkedIn profile so I'm not doing nothing. I'd be offering "consulting" and research services. It might be nice if it could be a side hustle once I did get a full-time job, but that's not critical.

Some of my questions:

1) What do I need to do to do this properly? Do I need to get a business license or anything like that?

2) How, exactly, would doing this this affect my ability to receive EI benefits? I know when I fill out the EI report I have to report if I worked at all during the time off, but would this count as being "self-employed" (given that I might not have any takers)? I would still be actively looking for full-time employment and be available to work.

3) Will doing any freelance work compromise my ability to receive EI? A former employer of mine approached me today and said they might have a project that I could work on. It wouldn't be a full-time job or anything but probably just one piece of contract work.
posted by synecdoche to Work & Money (2 answers total) 2 users marked this as a favorite
Short answer, yes it will affect your EI.

Long answer: how much and how badly depends on a number of factors. The worst of them happens to be the inability of EI/government office staffers to actually answer your question about how much it will affect your ability to collect (at least based on my experiences).

When in a similar situation, I asked if it was okay to do a bit of freelancing on the side. I was told yes, and that this was common, especially for people in the trades. When I asked about limits and how much I could work and how much I could make, I was never able to get a straight answer. Apparently there is some mysterious calculation about earned income versus EI benefits versus heaven-knows-what.

Honestly, I wish you luck in obtaining answers I could never get.

Depending on how much you bill, you may (or may not) have to register for an HST number. It's not required if it's under $30,000.

If you don't need to register for an HST number and you don't plan on taking on any employees, it's likely you won't need a business number but it won't hurt to read over the page and double check based on your personal circumstances.
posted by sardonyx at 7:07 PM on July 18, 2016

I've played this game before. But I am NOT a UE professional and none of this is advice. Except for "get on the phone and talk to an agent, they're nice". That's advice. :)

1) Not usually, but check your municipality laws just in case. If you live in an extremely regulated place, it's possible.

2) + 3) It completely depends on your state. You can probably look it up online, but I highly recommend getting on the phone and talking to an unemployment benefits agent. They have been nothing but extremely nice and helpful in my experience. Anyway, as an example, in Colorado the rules are (something to the effect of) that you have to be available for work, so if you're freelancing more than, like, 20 hours a week (NOT saying that's the real #) that will make you less eligible. As for $, after a certain amount (I forget how much) they will start reducing your payments by that amount, or some fraction of it.

I think freelancing while on unemployment is super common, so please don't worry too much. Talk to a professional and get it sorted out. And good luck!
posted by aperturescientist at 7:32 AM on July 19, 2016

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