PA Unemployment and problems with my "sideline business

[jcderosier]

Hello -

Once again the great state of Pennsylvania has decided to not give me what I have earned. I filed for unemployment in April of this year (09) and after paying back a PREVIOUS fault overpayment (not my fault but it's neither here nor there at this point) for the first month of my unemployment, I've received all of my regular unemployment. Starting three weeks ago, I was determined eligible for tier 1 benefits and did receive confirmation VIA letter from the PA UEC. I attempted to file my first claim of tier 1 on Sunday 10/4/09 and at the end of the filing process on the PAT line, a message came on that said I needed to talk to a UEC representative. I did that, got a nice Spanish lady on the phone that BARELY SPOKE ENGLISH that told me I was no longer qualified because I was "self-employed". I have filed EXACTLY the same way since I originally started my claim in April and have claimed EVERYTHING I have made with my part-time job so NOTHING has changed!!! My first question is, why are they doing this to me?? Where do they think the $100 - $150 I am claiming (I'm allowed $192 in PBR according to my original claim) as part-time employment comes from?? A little more background info.....In 2007, I started going to a trade school to learn Barbering, ON MY OWN DIME, because I knew the field I had been in for the past 15 years, trucking, was headed for a disastrous couple of years. I was laid off in April of this year, one month shy of graduating from trade school. I CANNOT find a job that will pay me anything NEAR what I was making in transportation but I have been Barbering on the side since 01/09.

I was not intentionally trying to mask ANYTHING with UEC but they are making it out like I was. I received a letter from them today telling me not only am I NOT qualified to get tier 1 any longer, but I am also required to pay back upwards of 6k that they have paid me since June and I've made approximately 2k from my sideline business. According to the letter I received and I quote, "you were found ineligible for UC benefits as of week ending 6/6/09 due to you being self-employed". Yes, I do work for myself but I do not OWN a Barbershop, I only contract spaces once or twice a week for 5 hours a piece and this does NOT interfere with trying to look and secure gainfully full-time employment. I'm at my wits end with this state as I feel as if they are trying to get out of paying me what is due. Should I appeal??

[Pauloz]

jcderosier

This is pretty bizarre. Some states do have specific regs and laws for self employed people, but not PA, as far as I can see having gone through the legislation for you.

Check this out, from PA Unemployment Compensation Law:

Section 402.4. Eligibility of Officers of a Corporation Deemed to be Self-Employed Persons."
(a) Notwithstanding any other provision of this act, an officer of a corporation deemed to be a self-employed person
because he exercised a substantial degree of control over the corporation and who becomes unemployed due to the fact
that the corporation enters into involuntary bankruptcy proceedings under the provisions of Chapter 7, Title 11 of the
United States Code shall be entitled to receive unemployment compensation under this act: Provided, That the wages
paid to the officer of a corporation deemed to be a self-employed person were mandatorily subject to this act.
(b) Unemployment compensation shall be paid to an officer of a corporation deemed to be a self-employed person,
who is eligible under the provisions of this section, in the same manner and to the same extent as unemployment
compensation paid to any other eligible claimant under the provisions of this act.

Clear as mud, eh? There's no other references to self employment in the Act, or the regulations, that I could find, and that's not a disqualification.

By rights, your claim is based on the former situation, and I didn't see any laws against self employment. That work would qualify as income in terms of your reporting, but I didn't see any disqualification from UC because of that, either.

(You'll need to check that, because that's a huge PDF, and I may have missed something, but on face value, there's nothing about it there.)

I'd say they're guessing. You may be interested to hear that US unemployment laws and regulations are drafted in a way that the rest of the world stopped using decades ago. They're abysmal, in terms of phraseology. They're worse in terms of realistic situations for the current part of history post 1900 where people do work like this.

I'm not surprised that lady was having some problems with your case, because I'm a pro writer with government experience and training in reading legislation, and it's a crossword to me.

You will need to appeal, and you'll also need to get some sense out of someone on that $6k, your right to work, and your right to earn external income. You need to get an official ruling to shut this circus down. Suggest a pro bono lawyer for some backup.

Don't know how you feel about your local reps and senators, but it might be worth bringing this up with one of them. This is one huge hole in PA law, if that's the way they're doing it. I don't see any justification for withholding benefits on the basis of a principle which effectively says "If you earn 5c doing some work for yourself, no benefits and you have to pay us back". It's totally disproportionate in terms of relative income compared to benefits, doesn't make any allowances for the needs of benefit recipients, and is about as fair as a bullet.

It'd make sense if you'd earned $20,000, but not on the basis of a third of your benefits. All other states, without exception, to my knowledge, just reduce the UC payments in proportion to income received. Why not PA? The best description of this situation would be "undue process", as far as I can see.

[jcderosier]

The thing that baffles me is that I'm allowed to make $192 in PBR but can't do what I'm re-trained to do!! I mean it's just very bizarre. After further research I found that in this pamphlet they sent me (section 402(h)) and I quote...

"Section 402(h) provides that a claimant is ineligible for any week in which he/she is engaged in self-employment. When a claimant is starting a new business, the claimant becomes self-employed with the first positive step toward starting the business. For example, the claimant would become self-employed when he/she began advertising for business, rented an office, purchased equipment/property, etc."

So, I think this is where they think they have me however, there is this neat statement below that says, and I quote....

"There is an exception in Section 402(h) for the operation of a sideline business. The Courts have provided a four-pronged test for eligibility for an individual engaged in a sideline business. An employe who has a proprietary interest in a sideline business may still receive benefits if it is proven that all four of the following conditions are met:
Concurrency - the self-employment activities must have been conducted while engaged in employment."

Primary Source of Income - the earnings from employment must exceed the net profit from the self-employment activities.

There cannot be a substantial increase in involvement in self-employment.

The claimant must be able and available for FULL TIME suitable work.
The burden of proof in a situation involving a sideline business rests with the claimant. The claimant must provide information and documents showing that the self-employment venture is a sideline business and that the claimant is separated from employment that constituted the individual's major source of income."

In my opinion, it's PA trying to get out of paying what's owed at my expense. It's unfortunate that they punish people who are actually trying to do a positive thing by taking "the first positive step toward starting the business" and truly stimulate the economy!! I just don't get it.

[Pauloz]

Rechecked after posting the original of this reply. Section 402 defines ineligibility as failure to comply with eligibility requirements pursuant to conditions, of which 402(h) is one. You haven't been ineligible in terms of your ability to get full time work, as a result of your sideline.

It also refers to "weeks" in a way which undermines their case:

Section 402. Ineligibility for Compensation.--An employe shall be ineligible for compensation for any week--

(h) In which he is engaged in self-employment: Provided, however, That an employe who is able and available for
full-time work shall be deemed not engaged in self-employment by reason of continued participation without substantial
change during a period of unemployment in any activity including farming operations undertaken while customarily
employed by an employer in full-time work whether or not such work is in "employment" as defined in this act and
continued subsequent to separation from such work when such activity is not engaged in as a primary source of
livelihood. Net earnings received by the employe with respect to such activity shall be deemed remuneration paid or
43
payable with respect to such period as shall be determined by rules and regulations of the department. ((h) added Dec.
17, 1959, P.L.1893, No.693)

So if you weren't self employed during a particular week, you'd have been eligible. Great system they have there.

Agreed, this isn't the way it's supposed to work, and a four pronged exercise in lawyer-breeding isn't a good working principle of law. In practice it means that any self employed person would probably have to apply, get knocked back, and appeal to get verification of entitlement, as well as go through the hoops of payment adjustments. It's arbitrary, bureaucratic, and doesn't even begin to address the fact that there's no working definition in the Act of self employment. As I said earlier, other states don't have this problem, self employed people are entitled to benefits, and even training, in some cases.

Not being able to use your retraining skills is a point worth making. You've been using those skills, trying to work, and you're able to apply for full time work as required, so what's the problem?

Sideline business, however, would be an apt description of a partial income source, and I think that's where you've got them, in terms of definitions. Point being you're not disqualified per se because you're deemed to be self employed, which is what they're claiming, and they should know their own rules.

I still don't see any basis for a totally misrepresented schematic of repayments when your earnings were so far below the benefits. That whole concept doesn't even begin to look like a reasonable option. If you'd been doing part time work, you wouldn't have this problem, if you'd earned as much or more. Even if you were earning enough to cancel out payments, eligibility for benefits shouldn't be affected.

[Pauloz]

Another point: The definition of "unemployed":

(u) "Unemployed."--An individual shall be deemed unemployed (I) with respect to any week (i) during which he
performs no services for which remuneration is paid or payable to him and (ii) with respect to which no remuneration is
paid or payable to him, or (II) with respect to any week of less than his full-time work if the remuneration paid or payable to
him with respect to such week is less than his weekly benefit rate plus his partial benefit credit.

Note: "...less than his weekly benefit rate plus his partial benefit credit."

Not "$2K = $6K".

[marshyam]

Hi, You do need to appeal. Make sure you research exactly what they are claiming is the reason you were ineligible, have evidence (pile them up with anything relevent) to prove the law is in your favor, not theirs and call your state rep to see if you can get free legal service or legal student in your area to assist with the appeal. Keep appealing, you will probably get a hearing with a referee to prove your case.
I am going thru this right now, I work as a merchandiser and have been laid off for about a year. The only work I have found is temporary part time, seasonal, or 1 day resets here and there in stores for different companies. All companies reguarded me as an employee and took taxes out, except 1. I worked 1 day to help set up shelves in a new store and the company did not take out taxes...hmm never happened before. I claimed the $90. earnings and the company filed an appeal claiming I worked as an independent contractor. They decided in my favor... they appealed again, they decided in my favor again. On the last appeal the board of review reversed the decision claiming I am an independent contractor and it does not matter if I do not have a business and it does not matter if I was not told before hand that the company would reguard me as one. I thought I would only have to pay back $175. for the week I worked there...but no they want $1350. for all claims after that because you cannot become an employee again until you work for someone who reguards you as one. Now I have to appeal the decision to the Commonwealth Court and really need a lawyer but they charge $2500. for the appeal and brief (required) and who know what after that. I wish I would have known this was going to be about more than $175. I would have gotten help 5 months ago at the early stages and this would never have happened. By the way you cannot enter new evidence at or after a hearing, wish I had known. Good luck!!

[MicV215]

Ok, i worked for a retailer for 5 years and in May of 2008 they let us know they were laying off 2500 managers. I was offered a job still but for a new position and new pay. I decided i would take the severance package and collect unemployment. At the same time i was working part time for a media group where i was hired as an independent contractor making 1000 bucks a month. I started that in April of 2008. I applied for unemployment and let them know i was making the money i was making from the media group. I was approved for unemployment and was receiving about 451 dollars a week. Every week i would submit what i made from the media group and i continued to receive my benefits. After my benefits ended on July 4 2009 i called up and they let me know i could still get 13 more week of emergency benefits or i could refile to open a new claim since i was only working part time still. So i reapplied for a new claim on july 5 2009. It took over 3 months to get a decision. They wanted to know if i was an independent contractor, so i had to send my bank account information, business card, fill out a 7 page document as well as my "boss" had to send the same info. I got info back that my new claim was denied b/c i didnt meet the requirements (no big deal in my mind) I also received a letter in the mail saying that i "wasnt considered self employed" because my "boss" still dictated to me what work to do and that i was eligible for benefits starting jan 1 2009.

So it took a few weeks but finally 3 days ago i received my 13 weeks of EUC (i believe its callled that) from my original first claim. So in my mind is i finally got all my money and thats that, i have to find a full time job quick or im in deep trouble. So i get a letter in the mail today stating that they overpaid me 17,787 dollars and that it had to be paid back because i was not eligible to receive benefits because i was self employed (jan 1 2009- oct10 2009).

I filled out the waiver paper right away and i am going to fill out the appeal paperwork tomorrow. But my question is why all of a sudden are they demanding this money back when they knew i was claming money every week? It states because i was self employed but in the other letter says its determined I am not self employed b/c my boss dictates work to me still so im not free from it. I was honest n submitted every week of my earning to receive my partial benefits and now all of a sudden they want me to pay back close to 18k?? I filled out the waiver letting them know that if i would of known any of this i wouldnt of filed. I spoke to many reps and they knew my situation and they never mentioned it to me before. I can barely pay my bills with the lil money i am making ( i didnt mention i pay 1,850.00 in estimated taxes every 3 months as well) and the money from unemployment, where do they think i can pay back 18k? Please help with any advice, im very confused and dont see how this is my fault when the whole time they knew what i was making each week, it seems like since they thinkg i was self employed now they dont want to pay me the money i was due. Please Help!

[Pauloz]

MicV215

To start with, your original claim was the basis of most of the payment you received.

The amount of money you've been asked for looks like the total payment for all benefits. That can't be right.

Your second contract job is the one they're having the problems with.

This same job has been described as:

Part time work
Self employed
Not self employed.

That's pure contradiction of their own status definitions. If you've got anything in writing about your status as either working part time or self employed, make a copy of it. You can prove you were acting on the basis of information from them.

I don't see how you were supposed to even understand your entitlements, based on the advice you received.

This is an absolute mess in terms of unemployment law. They could have told you whether you were eligible or not months ago.

The responsibility for granting payment of benefits is theirs, not yours. They're supposed to know what they're doing. You can truthfully say that you reported your work, you told them what you were earning. You were claiming on the basis of their advice, on the understanding that you were entitled to benefits.

Suggestions:

1. Find a pro bono lawyer, someone who only gets paid if they win. I strongly suggest this as your first move, because you need someone on your side.

2. Talk to the Dept Labor in your state, see if you can get a rational picture of your position and some options about how to handle it yourself.

3. You can make representations to your state rep or senator, but I'm not sure if that's likely to be either quick or effective.

[jcderosier]

Ok, now I have another issue with this. I just received my notice of hearing 10/24 and PROMPTLY called my local legal aide which told me to file for a continuance due to lack of time to prepare the case. I called the legal aide office two weeks ago trying to set up an appointment BEFORE I got my hearing date and they told me to call back when I was given a date. They said they need a week to prepare and the hearing is set for a week from today.

Now, I've called the "referees" office and they told me I have to give cause as to why I want a continuance, and the lady on the phone didn't sound as if it was something that could be done. Should I attempt this without an attorney?? I've gone a month and half without pay, JUST took a job making substantially LESS then what I was making BEFORE I started collecting unemployment and CANNOT pay this state an additional $7,600.

I feel alone and PISSED off and I feel as if this state is trying to take advantage of me. Does this really happen to other people?

Thanks in advance.

[Pauloz]

Ok, now I have another issue with this. I just received my notice of hearing 10/24 and PROMPTLY called my local legal aide which told me to file for a continuance due to lack of time to prepare the case. I called the legal aide office two weeks ago trying to set up an appointment BEFORE I got my hearing date and they told me to call back when I was given a date. They said they need a week to prepare and the hearing is set for a week from today.

Now, I've called the "referees" office and they told me I have to give cause as to why I want a continuance, and the lady on the phone didn't sound as if it was something that could be done. Should I attempt this without an attorney?? I've gone a month and half without pay, JUST took a job making substantially LESS then what I was making BEFORE I started collecting unemployment and CANNOT pay this state an additional $7,600.

I feel alone and PISSED off and I feel as if this state is trying to take advantage of me. Does this really happen to other people?

Thanks in advance.

This is a statutory legal process, and I think you're entitled to extra time. Get back to the legal aide, get them to ring and explain the situation. I have a feeling that it they say they want more time, it won't be dismissed. The minute someone says they're a legal representative people take more notice. I think whoever you were speaking to didn't get it.

Can't honestly recommend doing this without an attorney. This has been a screwy enough process as is, more like a Mad Hatters Tea Party than a legal process, without any further aggravation.

Congratulations on the job, not easy to get in this recession.

[jcderosier]

Yeah so, I filed for a continuance....faxed it twice AND emailed it.....they claim they never got it and had the hearing without me. Does it sound fishy NOW? Does it sound as if they DON'T want to pay me? Sure does to me.

Not sure what I'm supposed to do now except hire an attorney, that I can't afford.

[Pauloz]

Yeah so, I filed for a continuance....faxed it twice AND emailed it.....they claim they never got it and had the hearing without me. Does it sound fishy NOW? Does it sound as if they DON'T want to pay me? Sure does to me.

Not sure what I'm supposed to do now except hire an attorney, that I can't afford.

Did they get around to saying what the finding of the hearing was?
You should have the fax and email logs available as proof of lodgement.

That's why I suggested a pro bono lawyer. They only get paid if they win.

[jcderosier]

Yes, the finding was ineligible and I they also said that the overpayment was a "non-fault" overpayment with no penalty weeks. They keep bringing up this "free from direction or control over the performances of his services as a Barber" which is entirely untrue as I wasn't even licensed to work by myself until September. They are grasping obviously and shame on me for not harassing them about my continuance.

I can't find a pro bono lawyer, other then legal aid that will not even talk to me unless I have a CONFIRMED court date. No lawyers will touch this in this area I guess because of the liability with it being an unemployment hearing. Lucky me I can appeal again, but it's just taking entirely too long and now I've been forced to take a job that is paying me 1/4 of what I was making before unemployment and 1/2 of what I was making on unemployment and now I can't go back. Is this why they do this kind of crap??

If anyone knows any pro bono lawyers in my are that would be willing to take this on, let me know!

[Pauloz]

Yes, the finding was ineligible and I they also said that the overpayment was a "non-fault" overpayment with no penalty weeks. They keep bringing up this "free from direction or control over the performances of his services as a Barber" which is entirely untrue as I wasn't even licensed to work by myself until September. They are grasping obviously and shame on me for not harassing them about my continuance.

I can't find a pro bono lawyer, other then legal aid that will not even talk to me unless I have a CONFIRMED court date. No lawyers will touch this in this area I guess because of the liability with it being an unemployment hearing. Lucky me I can appeal again, but it's just taking entirely too long and now I've been forced to take a job that is paying me 1/4 of what I was making before unemployment and 1/2 of what I was making on unemployment and now I can't go back. Is this why they do this kind of crap??

If anyone knows any pro bono lawyers in my are that would be willing to take this on, let me know!

I'm in the wrong country to find a lawyer for you, but if anyone else knows a PA pro bono, can you drop us a line?

Only thing I can think of otherwise is if you can contact your local state/Fed rep or senator. They won't be ignored, at least.

[jcderosier]

That's next on my list. I'll make sure and let you know the outcome....if there ever is one.