Kaitlin Mulhere is Money's education editor, focusing on student debt, college affordability and the payoff of different postsecondary programs.
Has also written:
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Published: Apr 27, 2020 6 min read
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More than 26 million people have filed unemployment claims in the past month, a number that shatters previous records tenfold.
The sheer size of the out-of-work population means many of those millions are likely navigating the unemployment process for the first time. One common question among them: What happens if you pick up a short-term or part-time gig to earn some side cash? Does that make you ineligible for unemployment insurance?
The short answer is usually no, as long as you're earning less in part-time work than you're receiving in unemployment benefits.
"States generally encourage workers to maintain some connection to the workforce," says Michele Evermore, a senior policy analyst with the National Employment Law Project. "That's what unemployment insurance is all about."
The rules around partial unemployment are especially important right now. In addition to normal unemployment payments, which average between $215 and $550 a week depending on your state, there's an additional $600 a week in money from the federal government on the line. What's more, gig and contract workers are eligible to receive benefits for the first time; since these workers are more likely to string together a series of jobs from various employers, they may be more likely than their salaried counterparts to pick up a job here or there.
As long as you qualify for any unemployment based on your state's rules, then you're also eligible for the $600--officially called Federal Pandemic Unemployment Compensation--through July, says Andrew Stettner, who studies unemployment insurance policies as a senior fellow at The Century Foundation, a left-leaning think tank.
Like most details about unemployment benefits, the specifics of working part-time will vary based on your state. Your state's rules for calculating what's called partial unemployment will outline how much you can earn, and in some cases how many days you can work, while still remaining eligible for unemployment payments.
If you do pick up part-time work, keep careful records of how much you work and be sure you report that to your state's unemployment office during your weekly or biweekly unemployment certification, experts say. If you don't and the state finds out, they're likely going to make you repay the unemployment money and there are sometimes penalties, says Edgar Ndjatou, executive director of Workplace Fairness, a non-profit advocacy group for workers.
In some states, like Maryland, it's as simple as subtracting whatever you earn working part-time from whatever the state is paying you in unemployment insurance, Ndjatou says. Texas's system is similar, except that it subtracts your part-time earnings from 125% of your weekly claim. Minnesota will subtract 50% of your part-time earnings from your weekly benefit amount.
Losing one’s job can be a challenging reality to face, but a common one workers from all economic sectors might eventually have to endure at some point in their career.
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Most unemployed workers either apply for unemployment insurance (UI) or get a new job. Contrary to popular thought, some workers who have lost their job collect unemployment insurance while working part time — but there are rules governing how many hours might be worked (and how much money might be earned) before unemployment insurance benefits suffer. These rules vary from state to state.
New York Unemployment Insurance, as an Example
For example, per the New York State Department of Labor, you have to work under 30 hours — and earn less than $504 per week — to be eligible for partial unemployment insurance benefits. If you work fewer than 10 hours, you can report zero hours to UI, and retain your full unemployment insurance payment.
Weekly, 11-16 hours of work is the equivalent of one day of work and would result in a 25% reduction in your benefits, 17-21 hours is considered two days worked — and would cost you 50% of your weekly benefit rate — and 22-30 hours of work is considered three days worked and results in a loss of 75% of your unemployment payments.
Each State Has Its Own Unemployment Insurance Plan
Each state has its own qualifications for unemployment insurance based on an applicant’s previous earnings, as well as upon certain rates of benefit penalties (or reductions) applied to those who continue to work while drawing UI.
Some states pay only a certain amount — or for a certain number of weeks — and require you to be actively looking for a job while you are on partial UI. Some states, like Michigan or Wisconsin, have more complicated part-time employment/UI eligibility requirements.
Concerns Surrounding Unemployment Insurance
According to Indeed, unemployment insurance is a temporary financial respite to an unexpected loss of employment due to a company layoff or a considerable loss of hours at your job. Part-time employment is any position that requires an employee to work fewer hours and days than a full-time employee, and most smaller businesses set their own definition of full-time hours or duties. Larger enterprises (those specifically defined as an applicable large employer — or ALE — by the IRS, having more than 50 full-time or 50 full-time equivalent workers on staff) define full-time work as 30 hours per week, or 130 hours per month, however, per IRS guidelines.
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It’s also important to confirm your employment status. Employers may try to put employees on temporary furloughs — or assign them to a “zero-hour” schedule — instead of laying them off, or terminating their position. Depending on where you live, these employment statuses may prevent you from claiming UI. It is best to check your respective state’s unemployment website for specific UI details, benefit eligibility and processes.
Those interested in a comprehensive chart detailing each state’s eligibility guidelines can do so via UnemploymentPUA.
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This article originally appeared on GOBankingRates.com: How Many Hours Can You Work and Still Get Unemployment?