How you can earn money while keeping unemployment benefits

You probably know you can’t take a full-time job and keep collecting unemployment benefits (that’s known as double-dipping.) But you can keep your UI benefits coming and pick up extra work if you’re lucky enough to find some without putting your benefits at risk?

The general rule...

Side work doesn’t automatically negate your ability to collect unemployment benefits. There are a couple key factors. To collect unemployment, you have to be unemployed. So if your side job starts to expand to something that looks like full-time, your benefits could be at risk. Then there’s the amount you earn. Unemployment insurance is intended to fill the gap until you get back on your feet. Start getting more from side-work than your unemployment benefits, and those benefits could be at risk.

Your state governs the nuts and bolts, since each administers their own Unemployment Insurance program. Here’s a quick unemployment resource finder that makes getting answers by state easier. One point seems true of all, though; you’re required to let your unemployment benefits provider know of any work you take on.

Good news… Pretty much

Say you were laid off due to Coronavirus. A friend offers to pay you for some light contracting work at their house a couple days one month. You’re all good right?

Yes, in the sense that this one job doesn’t make you a full-time employee at your friend’s house. But you have to let the Unemployment Office know you’re working, how many hours, and how much you’ll be paid.

Why do the hours matter?

While collecting unemployment benefits, you’re supposed to be looking for full-time work, and the government doesn’t want your side work getting in the way. Also, the more hours of side work, the closer you get to being a full-time employee in the eyes of the government. So while you’re far from it in this scenario, it’s important to track and report. Be aware of how/if your side hustle changes. If you start working longer and longer hours, for example, report that and make sure it's within what the state allows.

On the plus side, in some states, while the amount will likely be adjusted, even significant part-time employment won’t cancel your right to unemployment benefits. And some states add a percentage (some as much as 25%) to the amount of benefits you receive, which you can earn in addition. This is to incentivize you to maintain some income through part-time work if possible.

Under the table… Overrated

Say your friend suggests payment “under the table” or “off the books.” Can you both agree to cash payment without reporting the income for a small job like this?

Many people think you don’t have to declare payment under a certain amount. That actually applies only to the employer, in this case your friend, who doesn’t have to file for paying you $600 or less. But you’re still required to declare it.

If someone were to see and report you working, or if your friend gets audited, you could be charged with tax fraud. And what if you start working more jobs and you’d like to use this income to refinance a loan? You could be working a significant amount without any proof when you need it.

Got it, now what?

Now that you know the parameters, side work may sound pretty good. So where are all these jobs? And is it safe, with the virus, to accept them?

Start by letting friends and family know you’re looking and what you can do. It may be the last thing you want to talk about, but so many of us are going through it, and that makes it easier. Also, share your availability on community networks like the Jobcase community boards and virtual job boards at places of worship or schools. Side work right now can include handiwork for reopening businesses, a filing or office project for a soon-to-reopen office, or food delivery. Just be sure to check in with your unemployment office before you start, and again with any changes every couple of weeks. Make a note of who you speak to for your records.

And safety is key. There's nothing worse than putting your life and the lives of those you live with at risk because of your side work. If something comes up, especially something like painting the neighbor’s fence where there aren’t clear guidelines, it’s crucial to follow the CDC guidelines to keep you and your neighbor healthy.