Since I lost my job last month, I’ve been slowly but surely attempting to navigate a variety of transitional waters. One of them that is a fascinating study in complexity and administrivia is the realm of unemployment compensation. Until now I have never really had much experience with the whole process or the rules. Sure, I knew if you lost your job through nomaze.jpg fault of your own you could be entitled to it, but that is about the extent of it (other than my partner’s brief foray with having her unemployment claims denied due to an unscrupulous employer, but that is another story). After a week of wading through the process I am weary and I haven’t even filed my first claim yet.

So, I thought perhaps I could simplify the whole idea for a post. Well, the first thing I did was google “unemployment compensation” and ventured over to the Policy Almanac. While this clarified the most basics:

The Social Security Act of 1935 (Public Law 74-271) created the Federal-State Unemployment Compensation (UC) Program. The program has two main objectives: (1) to provide temporary and partial wage replacement to involuntarily unemployed workers who were recently employed; and (2) to help stabilize the economy during recessions. The U.S. Department of Labor oversees the system, but each State administers its own program. Because Federal law defines the District of Columbia, Puerto Rico, and the Virgin Islands as States for the purposes of UC, there are 53 State programs.

the rest of the document makes me want to poke my eyes out with a stick.

The only thing I truly agree with is the word COMPLEX in their statement:

States have developed diverse and complex methods for determining UC eligibility. In general there are three major factors used by States: (1) the amount of recent employment and earnings; (2) demonstrated ability and willingness to seek and accept suitable employment; and (3) certain disqualifications related to a claimant’s most recent job separation or job offer refusal.

I feel the pain of complex and diverse, that is for certain.

My journey started with me filing my initial benefit claim the other week. I was told you always had a “waiting week” so I waited to file the initial claim for benefits until I returned from vacation (2 weeks after my final termination date). Wrong move. It has delayed the whole process so I cannot file my initial bi-weekly claim until this weekend (10/7). That is one month from my final date of employment. Now I am in Pennsylvania so anything I say may or may not apply to another state so take my opinions with a grain of salt.

Once I navigated the confusing web site I got to a place where I could file my initial claim for benefits. I have translated this step as — “file to let them know you’re going to file”. That’s all it is — a long questionnaire to basically let them know you’re coming and allow them to determine your eligibility and compensation levels. The questions aren’t that hard unless you answer “yes” to the sideline business question. Then you get a few additional pages of questions and a friendly call from your local unemployment compensation center the next morning requesting your Federal Schedule C. I have no problems with any of this because everything I answered is truthful. I have operated a business but it has been far secondary (income wise) to my “day job”. Not to mention I still meet the other criteria because I am truly available and able to accept other employment offers provided they suit my overall career and life goals as I continue to build my business.

A few days after I jumped through the filing hoops I received my handbook (a lovely thick pile of procedural confusion and legalese) and notice informing me of my compensation limits and partial benefits rights. I most certainly was not getting rich in my day job by any means, yet I learned from plowing though the weekly benefit rates and my handy dandy letter that I reached the state determined maximum. So much for the theory:

The State-determined weekly benefit amounts generally replace between 50 and 70 percent of the individual’s average weekly pretax wage up to some State-determined maximum.

I don’t know how they determine their maximum but my gut tells me some half-brained formula like the one they use to determine what constitutes poverty level. Highly unrealistic. Since I can’t do anything about these determinations I proceeded to start reading about how partial benefits work. The process being that if you earn a predetermined amount of money in a given week your UC benefits are reduced. Once you earn over a predetermined maximum, you get no benefits that week. Without divulging my details, I can tell you that those amounts are not much. That leads me to the challenges of record keeping.

Since I own a small business reporting gross receipts is going to be more complicated than if I simply found some part-time job on given weeks. I need to report any earned income so it is factored into my calculations. I have no problems with that and it is the law anyway. Where the trick comes in is figuring out when you actually “earn” the money. Is it: when you do the work? when you bill for the work? when you receive payment for the work? There is no hard and fast guidance in the handbook. So, I’m going with my accountant and tax expert’s advice. If nothing else it should ease administrative burden while keeping me in compliance.

In the state of PA, I am eligible for 26 weeks of full benefits. If I have weeks of partial or no benefits, I have up to 52 weeks to tap into the predetermined total amount of eligible benefits which was calculated based on my salary and predetermined maximums.

As if this isn’t brain cramping enough, there are the tax implications. UC benefits are taxable but you can elect to have taxes withheld at the time they are paid so you don’t have a whopping mess on your hands next April. That is what I chose. Who knows exactly how this plays out on the final tax filing. I suppose that’ll be a surprise for me come tax time next year when I meet with my tax accountant.

My next journey begins this weekend as I follow the path to filing my first bi-weekly claim. I am hoping it is a breeze, but am prepared for another maze of questions and vague governmental language. If anything interesting surfaces, I’ll let you know!

How about you? What has been your experience with unemployment compensation?

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Paula Gregorowicz is the Comfortable in Your Own Skin(tm) Coach and you can learn more at her website www.thepaulagcompany.com and blog www.coaching4lesbians.com .

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