Please help me navigate this unemployment situation!
May 22, 2020 10:59 AM   Subscribe

YANML Please help me evaluate this potential job offer. Details below the fold

I'm a freelancer (full-time since May 2019) and now collecting about $500 per week in Colorado unemployment benefits in addition to the $600 federal supplement. Most of my work has dried up but I can almost breathe financially and while I realize this is temporary, at least I'm not up at night worrying about paying for rent and buying a few groceries in addition to everything else we're all worrying about. I've declared every dollar of freelance earnings, which means that some weeks I've not received any UI at all. That's fair, no complaints.

A former client who had me on a monthly retainer until March would like me to work about 30 hours a month for them as a W-2 employee. Work would be completed in one week (they have a big project once a month) and pay will be between $1,500 and $2,000.

I'm eager to work, but worried that this may somehow screw up my unemployment benefits, and I can't get anyone on the phone at Colorado Department of Labor. My assumption is that Week One, I declare the $1,500 salary and receive zero benefits, and that the remaining weeks of the month I declare any other freelance income (currently maybe $200 per week) and then receive $550 - any earnings + $600 PUA.

I'm willing to talk to an attorney about this but have no idea how to even start looking for one who would specialize in this. It's extremely important to me to keep everything above board, but the UI is literally making the difference for me right now between paying rent and not. Any wisdom much appreciated!
posted by 2soxy4mypuppet to Law & Government (3 answers total) 1 user marked this as a favorite
Consider posting in /r/legaladvice/
posted by pyro979 at 11:41 AM on May 22 [1 favorite]

Not a Lawyer, Not in Colorado, am currently on Ohio unemployment, and was also back in early 2019 while occasionally working part time and/or freelance.

My assumption is that Week One, I declare the $1,500 salary and receive zero benefits, and that the remaining weeks of the month I declare any other freelance income (currently maybe $200 per week) and then receive $550 - any earnings + $600 PUA.

This seems correct to me, yes.

Colorado Unemployment Insurance Worker FAQs

PDF link: How to Record and Report Earnings While Requesting Payment of Benefits

I'm not quite sure what your concern is - is it that the Colorado Dept. of Labor will decide that that $1500-$2k is too high and will reduce your benefits for additional weeks? I don't think that's the case - AFAICT and IME unemployment benefits consider everything on a week-by-week basis and there's no limit to what you can earn on your own in a given week.

If your concern is that the Colorado Dept of Labor will decide that you're just making too much money yearly/monthly and decide that you just don't qualify at all, I think you're good there, too - AFAICT there's no "maximum income" limits for collecting unemployment. There's definitely a "maximum payout", though.

The thing that might be somewhat relevant here is that it's unclear to me whether your ability to collect unemployment as a freelancer is allowed in Colorado under the normal course of things, or whether it's a special circumstance that's part of the PUA that allowed freelancers to claim unemployment they would not be normally allowed to.

In the normal course of things employers pay a specific tax that goes into a state's Unemployment Insurance fund, which then pays out for "X" number of weeks in a 52-week year up to a total dollar amount (this varies from state to state.) So as long as you've qualified for unemployment benefits, you can collect for any weeks you are unemployed up to the total allowed number of weeks and/or dollar amount. (Colorado seems to be fairly generous here - you're allowed to file for UI as long as you've earned $2500 over the last 18 months before filing.)

If your ability to collect as a freelancer is due to the CARES Act PUA expansion, I still think you're legit, because there again doesn't seem to be any sort of "maximum income" limit.

Pandemic Unemployment Assistance: 20 Questions (and Answers) for Employers explains some of this.

If it's a special thing due to the pandemic, you might want to eventually look into structuring your business in such a way that you're an employee of your own company and have the company pay into the UI fund. Also at some point (currently July 31, I think) the additional PUA money will cease, and so you'll be down to the $500 "regular" unemployment. And then if you want to continue to collect once the "regular" runs out, there's a 13-week extension in the CARES Act (Pandemic Emergency Unemployment Compensation), but it seems like to get that you have to apply all over again, which could take a while to clear, so you should budget for that.
posted by soundguy99 at 4:43 PM on May 22 [1 favorite]

I am a little unclear on the arrangement. Are you an employee of the company the other 3 weeks of the month when the big project week is over? Do they lay you off each month and rehire you? If you remain an employee during the no hours 3 weeks, can you answer the weekly certification questions about working with a no work? Why do they suddenly want to make you a w-2 employee? What is different for them (and you) than the 1099 compensation arrangement previously? It does not sound like you will be eligible for benefits if you are a part time employee.
posted by AugustWest at 5:31 PM on May 22 [2 favorites]

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