One of the concerns for someone embarking on a contingent work assignment is the question of whether unemployment insurance benefits can be claimed between jobs. The answer depends on the contingent worker classification. Contingent workers are engaged by a company to perform a service or complete a project for a specific period of time. Of course, contingent workers come in many flavors – freelancers, small teams to whom a project has been outsourced, college interns, and agency-supplied contract employees. Unemployment benefits apply only to agency-supplied contract employees. Why? Because they are in fact employees of the staffing agency that has placed the worker on the assignment. When staffing agencies employ someone as a contract worker, they are in fact taking on the role of an employer of record for that worker – even if the worker is based at another company and managed by that company’s staff.
Workers can claim benefits when the agency fails to find them another assignment after the end of a previous one. In some states, they may also claim unemployment while on an assignment, depending on the payment on that job. A worker can contact the state unemployment security commission to find out how much they are qualified to receive while on their contingent job.
Many people and companies are not aware of the fact that contingent or seasonal employees may become eligible for unemployment benefits at the end of their assignment. Qualifications vary by state, with many states specifying the minimal required length of employment or amount paid to qualify for unemployment compensation benefits. Some states exempt casual workers – who take up assignments for a day – from unemployment benefits. When local authorities hire students to help with emergency situations like natural calamities, they are not considered eligible for unemployment compensation once their assignment ends.
Generally speaking, when a worker who was performing services for compensation finds that the work is not available to them anymore (in other words, they successfully completed the assignment or the engagement was canceled by the client for reasons other than dissatisfaction with the worker’s performance), the worker may file a claim for unemployment benefits, provided they earned a minimum compensation during the base period of their employment.
To ensure compliance, employers will need to know the rules in each state, as they differ significantly from each other. States differ in their calculation of alternative base periods to measure minimum earnings. However, all states are consistent when insisting that the worker being available and actively in search of work.
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