NY Unemployment Insurance Vent

[applecrispy]

I am so upset and angry right now. DH finally started a business this year. It's been his dream to become a business owner so he created a LLC and is the sole proprietor. This is totally a side job/hobby and was never meant to replace his income from his regular full-time job. He MIGHT make $200 a month profit, if that, which goes right back into the business to buy more tools. He said he had a dream last night that he lost his full-time job. He's the bread winner in the family bringing home a very nice paycheck. He said that freaked him out and he was wondering if the business would affect any unemployment insurance he could get. So he called the general information phone line at the NY Dept of Labor where the woman said she "couldn't help him and each claim is looked at individually". HOLY CRAP. If DH gets laid off and he can't collect unemployment because of a $200 a month side business we are screwed. He is in agreement with me that if that's the case we need to shut down the business ASAP and not take any chances. I'm so angry right now- we spent a couple thousand setting up the business and making sure everything was set up correctly to find out that we may get screwed if he ever lost his job. 

[winecat]

The UI rep confirmed that he wouldn't be eligible for UI because of the existence of his LLC?

[Susie]

It sounds like you are jumping to a lot of conclusions and need to find out a lot more concrete information before you start panicking.  

[applecrispy]

Nov 19, 2018 9:56:55 GMT -5 winecat said:

The UI rep confirmed that he wouldn't be eligible for UI because of the existence of his LLC?

Their website says that as long as you are employed elsewhere you aren't eligible. It goes into detail that says even if you aren't compensated at that time or making profit, you are employed and may not be eligible for benefits. So DH called for clarification and the rep told him she can't give him a definitive answer because they look at claims on a case by case basis. So we can't find out unless he actually loses his job, files for unemployment and a case is opened for him.

[applecrispy]

Nov 19, 2018 10:03:08 GMT -5 Susie said:

It sounds like you are jumping to a lot of conclusions and need to find out a lot more concrete information before you start panicking.  

That's the problem. There is no way of getting concrete information unless he actually loses his job and files for unemployment. Dh also called the Individual Claim Assistance hotline who told him they can't help unless he has an active claim and to call the general inquiry phone number which he did and they can't help because it's on a case by case basis.

[Susie]

Nov 19, 2018 10:05:18 GMT -5 applecrispy said:

Nov 19, 2018 10:03:08 GMT -5 Susie said:

It sounds like you are jumping to a lot of conclusions and need to find out a lot more concrete information before you start panicking.  

That's the problem. There is no way of getting concrete information unless he actually loses his job and files for unemployment. Dh also called the Individual Claim Assistance hotline who told him they can't help unless he has an active claim and to call the general inquiry phone number which he did and they can't help because it's on a case by case basis. 

I don't personally practice in this area of law, but I'm confident that an attorney who does could give you some reliable guidance.

[applecrispy]

Thank you Susie , I will have him find a lawyer in our area who can hopefully provide more guidance.

[smock]

I would also recommend reaching out to an employment lawyer to get more specific information. Especially if he's not making any profits from the LLC.

It's possible that he'd still qualify, but he would have to report any profits from the LLC, which could lower his unemployment.

[winecat]

Nov 19, 2018 10:03:16 GMT -5 applecrispy said:

Nov 19, 2018 9:56:55 GMT -5 winecat said:

The UI rep confirmed that he wouldn't be eligible for UI because of the existence of his LLC?

Their website says that as long as you are employed elsewhere you aren't eligible. It goes into detail that says even if you aren't compensated at that time or making profit, you are employed and may not be eligible for benefits. So DH called for clarification and the rep told him she can't give him a definitive answer because they look at claims on a case by case basis. So we can't find out unless he actually loses his job, files for unemployment and a case is opened for him.

I'd definitely consult an attorney.  Here there is no way UI would know if you had an LLC unless you told them.  We can also dissolve a LLC immediately on the SOS website.  I'm guessing there are options.  

[formerlyak]

What smock said. In CA, if you qualify for unemployment, you can still collect if you make money that week (ours goes by week), but you have to report any income you make and the unemployment is reduced by the amount you earned. So if your weekly benefit was $500 and you made $100 that week, you'd only get to collect $400 that week. From what I have heard from friends, they actually encourage that because one of the criteria for collecting in our state is proof that you have been looking for work, so earning a small amount shows you are trying to get/find work.

[jwright]

I would also recommend to look at this further. It would depend on how your state defines employment. Partners in an LLC are called members, and members cannot be employees for federal income tax purposes; they take money out through draws and/or guaranteed payments (not salary). Agree that a consultation with a lawyer would bring some peace of mind.

[mccallister84]

I mean you don’t anticipate him becoming unemployed right? And if he did could he just stop the business then? Go on hiatus so he’s not making any income?

I feel like this is a whole lot of worry for a hypothetical situation.

[applecrispy]

Nov 19, 2018 10:14:28 GMT -5 smock said:

I would also recommend reaching out to an employment lawyer to get more specific information. Especially if he's not making any profits from the LLC.

It's possible that he'd still qualify, but he would have to report any profits from the LLC, which could lower his unemployment.

If that were the case I'd be completely fine with it. I could understand that if he makes profit it would lower the unemployment. I'm worried about him not qualifying at all. 

[applecrispy]

Nov 19, 2018 10:19:17 GMT -5 winecat said:

Nov 19, 2018 10:03:16 GMT -5 applecrispy said:

Their website says that as long as you are employed elsewhere you aren't eligible. It goes into detail that says even if you aren't compensated at that time or making profit, you are employed and may not be eligible for benefits. So DH called for clarification and the rep told him she can't give him a definitive answer because they look at claims on a case by case basis. So we can't find out unless he actually loses his job, files for unemployment and a case is opened for him.

I'd definitely consult an attorney.  Here there is no way UI would know if you had an LLC unless you told them.  We can also dissolve a LLC immediately on the SOS website.  I'm guessing there are options.  

DH set up a consultation with a lawyer for December. We can dissolve a LLC as well, but I'm not sure if we can dissolve it after he gets laid off because it may count as "quitting" because it's a sole proprietorship. In which case he wouldn't get the benefit.

[applecrispy]

Nov 19, 2018 15:28:27 GMT -5 mccallister84 said:

I mean you don’t anticipate him becoming unemployed right? And if he did could he just stop the business then? Go on hiatus so he’s not making any income?

I feel like this is a whole lot of worry for a hypothetical situation.

We don't anticipate him becoming unemployed anytime soon but his company has been "restructuring" other departments in the last few months while his department has been untouched for years. It would not surprise me if they started weeding people out in his department so we don't want to be unpleasantly surprised. Unfortunately in NY they do not care if you aren't making any income- just being a member of a LLC can preclude you from getting the unemployment benefit. We have to figure out if we shut down the business AFTER he gets laid off if he would still be entitled to any benefit. DH has made an appointment with an employment lawyer so we can figure out our options. 

[gaudi]

Just FYI- depending on state laws the max unemployment benefit is only like $400 a week and is reduced by any severance or vacation payout.

[wildrice]

Nov 19, 2018 16:22:11 GMT -5 applecrispy said:

Nov 19, 2018 15:28:27 GMT -5 mccallister84 said:

I mean you don’t anticipate him becoming unemployed right? And if he did could he just stop the business then? Go on hiatus so he’s not making any income?

I feel like this is a whole lot of worry for a hypothetical situation.

We don't anticipate him becoming unemployed anytime soon but his company has been "restructuring" other departments in the last few months while his department has been untouched for years. It would not surprise me if they started weeding people out in his department so we don't want to be unpleasantly surprised. Unfortunately in NY they do not care if you aren't making any income- just being a member of a LLC can preclude you from getting the unemployment benefit. We have to figure out if we shut down the business AFTER he gets laid off if he would still be entitled to any benefit. DH has made an appointment with an employment lawyer so we can figure out our options. 

I mean, did you actually verify this? Your OP made it sound like the person on the phone just didn't want to be held liable for answering a question without having done any research on your particular situation. To me, it sounds like that CAN happen but if your business is truly only pulling in that little bit of money, I highly doubt it would disqualify. A business making $200 a month is not the same as a business making 200k a month so I can see why there is not a blanket answer that applies to all people.

Further, depending on the business I think this could be incredibly short sighted. Do you anticipate turning a profit in the future? Do you anticipate it taking a very long time for your H to find another job? Do employees typically get severance when they are laid off? Unemployment is generally only a few hundred dollars a week. If you've sunk time and money into setting up this business, is it worth throwing all of that away to get a couple of thousands of dollars worth of UE? Can you work on building up more of an efund so you don't have to panic if you lose income short term?

Honestly in your situation I would try to keep some perspective and take a deep breath. This all sounds relatively unlikely and like there are a lot of conclusions being jumped to.

[dochas]

Each state is going to handle it differently. When I became unemployed in NYS you couldn't earn income and collect. I had accepted a very part time second job before becoming unemployed, but I was not able to receive unemployment if I earned any income. They would not deduct the amount from my check. So If I earned $50, I wouldn't get the $400 that week. I don't know if it's still the same way now or how they handled LLCs, but don't go by what any other state does.