How 1099 workers can get unemployment benefits

If you worked in the role of an employee but had to work as a 1099 in order to be hired, you can still apply for unemployment benefits.

Whether you are an employee or a contractor is goverened by state and federal law and not by the employer.

If you worked at the employer's site, had hours dictated by the employer, worked under the employer's supervision / management, and used the employer's equipment, you were an employee. You should file a claim for unemployment and tell the state you are contesting the 1099 status that was forced on you.

While working as a 1099, do not send any e-mails or write any documents stating that you are a 1099, other than whatever original contract they made you sign. Try to establish an e-mail or paper trail showing that your wrk was supervised by their management.

Your status as an employee will be decided by the state unemployment office. The likelihood is great that your employer will not even bother to show up for the meeting or phone call. Their lawyers will tell them not to show up.

A federal claim is completely separate from getting unemployment from the state. You have to file an SS8 claim. This is to pay taxes as an employee rather than pay self employment tax. You do not have to do this in order to get unemployment. The state doesn't force you to amend your federal tax return.

I am not a lawyer and this does not constitute legal advice. I am just giving people the benefit of knowledge I have from successfully challenging 1099 status in the past.

Thanks for the info. I am currently working on a 1099 and this is good to know.

Thank you for this information. I am sure it will be helpful to many. The recent "trend" these days is to hire on a 1099 basis to avoid paying taxes, leaving it all up to the employee, even though by definition, they are NOT 1099 employees.

Bump

What if the company you worked for is no longer in business?

That is certainly a good question. Wish I had an answer for that one.
With the latest down turn in the economy I'm nit feeling secure at all in my current job. I may have to see if this theory holds up soon.

walkbythelake is absolutely correct. It is against federal tax law for an employer to hire you 1099 just to avoid paying taxes.

My part time job did that. He hired everyone this season on 1099. What his employees don't know yet is that when they file their taxes next year they will owe all the self employment taxes as well.

The employer will deduct the cost of the labor that he had to "outsource" from his taxes. He will get all the profits while his employees pay all his taxes. It's wrong and against the law.

If the employer supplies your tools, dictates your hours, and acted like a boss and not a customer then you are an employee.

Whether your company is in business or not is irrelevant to the topic, all the same rules apply.

W2, W2-per diem, 1099, or incorporated (corp - corp)... you've still worked. Hope we don't have any members running their cup across the jail cell bars by following this info verbatim.

1099 employees must pay their own taxes quarterly and the employer does not pay UI. So at the end of the year when the employer sends the tax man your 1099 work info, guess what?

That's true X but it's the tax man that decides if you are an employee or not not your boss regardless of what form you filled out. You will still owe taxes, yes, but the topic is unemployment insurance and you will only owe an employee's share, not both.

I think the value of this thread and alignment to the "topic" would be greatly clarified by, if nothing else, changing the topic/thread title to "How Misclassified 1099 Workers May Be Able To Collect Unemployment Benefits".

I believe walkbythewater has brought up a good area for 1099 worker awareness. However my point is that if you are a 1099 worker and the situation under which you are working is within the definition of a permissible 1099 classification - then you will NOT receive the UI benefits drawn from a W2 arrangement and the employer payroll taxes paid - called unemployment insurance.

1. A 1099 worker does not receive unemployment.
2. Yes, a worker who contests their 1099 status through filing an SS-8 to the IRS "may" change their status and "may" be able to receive worker compensation, but the operative word here obviously is "may".

But my emphasis is on (1)... In the end if you are a valid 1099 worker, you've accepted the consequences from entering into and commencing this work arrangement.

But this is a good discussion... just need to tighten up on some particulars.

Thanks.

OH I see what you mean now! Agreed. If you truly are a 1099 you cannot receive unemployment benefits.
However, if you are misidentified then you can regardless of paperwork.

lendmeflight2 wrote:OH I see what you mean now! Agreed. If you truly are a 1099 you cannot receive unemployment benefits.
However, if you are misidentified then you can regardless of paperwork.

High five! Yes. But I have to qualify again with the word "maybe baby" with regards to collecting even if one has worked under a bad boy employer and 1099 mis-classification - I don't believe it's a 100% given.

I think it's up to the state and fed on an individual basis.

Independent Contractor vs. Employee: New IRS & FLSA Crackdown

http://springboard.resourcefulhr.com/?p=1462

DesperateInRI wrote:Independent Contractor vs. Employee: New IRS & FLSA Crackdown

http://springboard.resourcefulhr.com/?p=1462

Thanks Desp, great article and good backup for what I've said, thank god!

I just had dinner with a young engineer who has a good reason to be 1099, working at $150 an hour and all expenses paid to boot to be away from home - like living at Las Vegas very nice hotel, travel, and meals included - this is when 1099 is far better and in his case most applicable to this arrangement.