Can I Collect Unemployment If I Worked on Commission?
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In short, anyone can collect unemployment benefits as long as he meets the criteria established by the state in which he works. Federal employer taxes, paid at a rate of 6.2 percent on the first $7,000 earned by each company’s employees, and various employer taxes levied at the state level fund the U.S. Department of Labor's Unemployment Insurance (UI) program. The federal government has established minimum requirements that states must meet, such as a person becoming unemployed through no fault of his own, but states are free to tailor their unemployment benefits programs as they see fit.
Whether your income was derived from a salary, hourly wages or commission-based employment, you must have lost your job through no fault of your own, as stated by the U.S. Department of Labor UI guidelines. For example, if you were laid off due to your company’s poor financial performance, then you would qualify for unemployment benefits (assuming you meet other requirements). If you voluntarily quit or if you were fired for just cause — absenteeism, theft or violation of company policies, say — then you aren’t eligible for benefits. Appeals processes are in place if you feel that you were wrongfully terminated. Check with your state unemployment agency for details.
Source of Income
The federal government doesn’t care in what manner you made your money — as long as it was legal — for you to qualify for unemployment benefits. Working on commission, however, can pose unique problems when filing. People who are paid a salary or hourly rate (which includes many people who receive additional commission payments) usually have no problem documenting their income when filing for unemployment. Their gross income can be verified by check stubs or by the local unemployment office through payment verification methods. If you are paid solely on a commission basis, however, problems can arise depending on your company’s payment method. Some companies issue standard checks complete with withholding taxes, in which case you should have no problem. But if your company pays by a different method, such as quarterly or monthly checks and no deductions are made, it may be difficult to prove that the money paid was actually for employment purposes. You should contact your employer and get a letter of verification stating your exact compensation amount for the period in question.
Again, no matter the source of your income, you’ll have to meet your state’s income-formula criteria. Each state has its own method of determining eligibility and the amount of your benefit payment. You may have to have been employed for 90 consecutive days prior to filing for benefits. Most states establish some type of “base” period, such as the previous year, to calculate how much money you made and then base your weekly unemployment benefits on that formula. Connecticut, for instance, uses the two highest-earnings quarters of the last four, divides that total by 26 and arrives at a weekly benefit amount. Obviously, you’d like to establish the highest dollar amount of income possible in order to qualify for maximum benefit payments, and commission payments can sometimes be tricky in that regard.
Like any other applicant, you’ll have to meet your state’s criteria for filing. Most states have strict guidelines that require benefit recipients to be able and willing to work, be actively seeking employment and to report on a regular basis to their local unemployment office.
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John Kibilko has been writing professionally since 1979. He landed his first professional job with "The Dearborn Press" while still in college. He has since worked as a journalist for several Wayne County newspapers and in corporate communications. He has covered politics, health care, automotive news and police and sports beats. Kibilko earned a Bachelor of Arts in journalism from Wayne State University.