Hi,
I'm an aspiring agent about to be laid off here in California. Anyone know if I can legally collect unemployment while working a an agent until I collect my first commission check?

This is a great site by the way.

You'd best contact your local county assistance office to discover that.

I would assume that you could if you're not collecting any kind of salary....

you probably can...but they'll ask you on the weekly claim form at what times during the week you were NOT available to accept work. and if you report on the form that you were doing office floor time, they'll probably withhold part of your weekly benefit for that time. of course, if you don't report it, they won't know the difference.

you might argue that even while doing floor time, you are available via telephone and could leave immediately to accept work. but the state employment agency might not see it that way.

Unless there has been a change in the rules (or they are different in your state) you will loose 25% of the unemployment benefit for each day you work during any week; 4 days of work and the entire week's unemployment benefit is gone. Work is defined apart from actually receiving pay so even if you were prospecting in the expired list you would be considered to have worked regardless of obtaining a listing let alone being paid a commission.

then don't call it work.

Until a Commission Check is earned, one might interpret your activities as nothing more than Training and Education in a new field of endeavor, hoping that it will become a form of gainful employment for you.

Was Unemployment Insurance paid on your compensation in the position from which you're being laid off ?

Dale:

Unless things have changed a lot since I worked for someone else the unemployment insurance is an employer, not an employee, expense.

Mr. Foreclosure

as far as the state employment agency is concerned, it only matter that you were NOT available for work. the reason is not relevant. even if you are enrolled in job training, during that time you are not available for work. so, if the state is aware of the training, you must report in on the claim form, and they will deduct part of you weekly benefit.

I was truthful and they canceled my benefits when I told them I was working as a Realtor, even though I was months away from my first "paycheck."

I think it's best to be truthful because if you get caught, the fines are worse than the value of the benefit.

Shana:

I know from personal experience that retraining programs do not impact your abiity to collect unemployment insurance benefits, at least not 14 years ago in NY. With regard to your comment about being available for work you need to remember that you can cancel the traing and go to work anytime that a job becomes available.

Mr. Foreclosure

your wrong

unemployment insurance is paid only by the employer.

Locally: Bottomline Review

It is my understanding that the key requirement in most jurisdictions is that a claiment must be activitly seeking employment and be available for work in order to qualify for benifits.

In the event a claiment was unavailable for work under any circumstances then the benefits would either cease or be reduced appropriately.

The question, that then arises is how does one interpret available.

Consider, if you will that a claiment might even journey out-of-state to seek employment and/or a job interview and still be available should employment become available locally.

The bottom line is whether you judge yourself as being totally unavailable under any circumstances or available under any circumstances should an opportunity for employment arise.

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information .

"The bottom line is whether you judge yourself as being totally unavailable under any circumstances or available under any circumstances should an opportunity for employment arise."


nope, the bottom line is whether the state employment agency determines you as being unavailable. this will ultimately be decided via an adminstrative judge ruling.

I know that some state employment agencies have ruled that when a person is enrolled in and attending a class, that person is NOT available for work...even though the student is reachable via cell phone and could leave the class immediately to perform the work.

there may be some exceptions by the state employment agency, concerning authorized job training programs, in which some UI benefits are still paid during that time, or benefits may be extended while the claimant is enrolled in the job training program.

Update: Shana is right

That the state would make the final determination pursuant to their policies and/or current law, although there are grey areas that could be argued, an adjudicator would make the final decision.

Locally: In has already been determined that any person who is a licenced to practice real estate is ineligible to collect employments benefits.

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information .

"Update: Shana is right"

isn't this always true? LOL

your WRONG

then there's my friend's significant other who is collecting benefits - but he's only available two hours per day - when he's not drunk, sleeping it off, or hung over....

it's annoying that someone like he could collect benefits and someone like someone who lost a job and is becoming a hard working new agent couldn't collect even though he/she wouldn't see any income for months....yet this jerk can collect his check, cash it, and drink it off.

such a messed up system we have, eh?

A Question:

Many years ago in San Diego, California, I can remember a time when it seemed that every Tom, Dick and Harry that held a full time job also sold real estate part time in the evenings or on the weekends.

And when the economy took a nose dive and most companies were laying off, 5,000 from Ryan Aircraft in one day, some of the laid-off workers applied and received benefits even though they held a real estate licence.

Those laid-off workers felt that they were entitled to the benefits, as they currently had no other income and had to put food on the table.

My question is:

Should those laid-off workers have been treated the same as any other worker who had been laid off from their full time job or not?

in my personal opinion - Yes - unless they actually had income coming in from the real estate activities.

having a real estate license isn't a guarantee of any income.

Personally, I have never experienced one day in my 19 years of selling real estate that I could honestly say I was not working. Even when I was training there was work mixed in there. Call it what you will, I call it work.

If you collect unemployment while you are competing with me in my profession then you become just another one of those milking the system whether it is technically legal or not.

Another thing, you should run this past your broker first. If the state comes after you for fraud your broker might not wish to have their company dragged into it.

And where is a moderator. This is a forum where the public comes for real estate advice from professionals and here is a thread giving advice on how to circumvent the law to collect unemployment benefits.

I didn't think anyone is trying to circumvent the law - I didn't think anyone was 100% definite on what the law IS regarding working a job where you can collect unemployment when laid off.

There are some personal opinions, but I really didn't think anyone was trying to circumvent the law.

Unless I misread something here, I don't see where anyone's trying to circumvent the law. One of the things everyone needs to keep in mind, however, is that if you've been working as an independent contractor long enough, you're not eligible for unemployment. Here are the eligibility requirements in California:

Meeting Eligibility Requirements

An individual who files for unemployment insurance benefits must meet specific eligibility requirements before benefits can be paid. Individuals must:

Have received enough wages during the base period to establish a claim
Be totally or partially unemployed
Be unemployed through no fault of his/her own
Be physically able to work
Be available for work which means to be ready and willing to immediately accept work
Be actively looking for work
Meet eligibility requirements each week benefits are claimed
Be approved for training before training benefits can be paid

Wages to establish a claim

Employers report wages to the Department for each employee. The Department uses this information to decide if an individual earned enough wages in a base period to establish a UI claim. A base period is a specific 12-month period. For example, if a claimant files a claim that begins in April, May or June the claim is calculated based on wages paid to the claimant between January 1 and December 31 of the prior year.

The minimum weekly benefit amount is $40 and the maximum weekly benefit amount is $450. For more information about how the Department calculates a UI claim, review A Guide to Benefits and Employment Services, DE 1275A and the California Employer's Guide, DE 44.

Reason an individual is unemployed

The reason an individual is out of work can affect his/her eligibility for benefits. A person who is laid off is out of work through no fault of his/her own. A person who quits work or is fired from work will be scheduled to a telephone interview because there is a separation issue that must be resolved. The Department interviewer obtains and documents information about the separation from the employer and claimant and decides, according to law and regulations, if the person is eligible to collect benefits. The Department mails a notice to the claimant who is not eligible for benefits. The Department mails a notice to the employer who responded timely to the notice of claim filed. The notice advises the employer about whether the claimant is eligible or not, and whether the employer's account will be charged for benefits paid to the former employee. Either party can disagree with an unfavorable decision and file an appeal.

Individuals must meet eligibility requirements each week that they claim benefits

A person must be physically able to work, available for work and actively looking for work each week benefits are claimed. An individual must complete a claim form every two weeks, sign and date the form and return it to the Department for payment. If the information on the form shows that the individual did not meet eligibility requirements, the Department will schedule a telephone interview. Based on the information obtained, benefits may be reduced or denied. An individual who disagrees with our decision to reduce or deny benefits may file an appeal.

Review finding a job to learn more about services EDD provides to job seekers.

Approved Training

Individuals interested in enrolling in training to increase their job opportunities must contact EDD for approval. Claimants attending an approved training course are not required to look for work, be available for work or accept work while in training. Take the time to read our fact sheet about the California Training Benefits Program and review the Find Training section of this Web site.

For more information about UI: http://www.edd.ca.gov/Unemployment/

Linda

And I thought we were talking about someone who was employed and eligible for benefits due to being laid off and who was not collecting any income from real estate activities at the time.

We were not talking about someone collecting commissions under the table or something.

We WERE talking about someone - who was employed but now isn't - collecting benefits until they made income from real estate activities - which is very different, IMHO, than cheating the system.

And as I said in my first reply on this post - CHECK WITH YOUR LOCAL OFFICE TO FIND OUT WHAT IS ALLOWED.

to my knowledge, simply holding a RE license does NOT disqualify any person from receiving UI benefits.

there are two determinations the state employment agency makes upon application...eligibility and qualifying wages.

UI qualifying wages are determined by the claimant's employment history retroactive up to eighteen months from the application date. If the claimant worked as an employee during that retroacdtive period (not an independent contractor), and earned a specified minimum amount, those wages should be qualifying, regardless of the claimant's current status.

eligibility is typically determined by the reason for the claimant's leaving his/her last employer. for example, if terminated for cause, the claimant may be held ineligible to receive UI benefits.

Just having a real estate license is not grounds to be disqualified (I think most of us know agents that, for lack of a better description, are "dormant") however if you are actively using it you are considered to be working. I think we all know that the work that goes into being a real esate agent is distributed over many more days than just the day we receive the payment check. That said, when claiming benefits and baseing your eligibility on not having worked the previous week you need to exclude days where you were showing properties, farming for listings or doing other tasks in hope of generating an income.

I would say yes, since they were entitled to the UI benefits as an employee of the company, and were laid off by no fault of their own.

Adding Fuel to the Fire -

My personal opinion is that a licence of whatever nature, by itself, should not have any bearing on the eligibility and/or entitlement to employment benefits. However, those receiving benefits should make full and timely disclosure of any earned income from whatever source.

For example, and to the best of my knowledge, laid-off Auto Workers, who were full time auto employees, some of whom currently hold plumber's licences, electrician licences, cab driver licences and real estate licences, seldom make any specific reference to that fact when applying for their employment benefits.

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information .

Check with the office where you apply for UI benefits. I think you will find the question isn't if you received pay or if you are licensed but rather did you actively work at that business.

Locally those with a real estate licence have always been ineligible for employment benefits.



Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information .

"Locally those with a real estate licence have always been ineligible for employment benefits."

that's simply not true, and the state employment agency will confirm this via their own eligibility requirements.

they would have no qualifying income and no eligibility if they had ONLY commission income as an independent contractor up to 18 months (or the "base period") prior to applying for UI benefits. it's the type of employment and earned income during the base period that matters.

Rules May Vary depending upon the country and whether its a State or Federal program. Consider the following:

Sometime ago in Canada there was an issue regarding allowable tax deductions for business related expenses by real estate agents and what their actual status was in relation to the deductions claimed on their tax returns.

The primary issue was whether agents who normally enter into a contract with a brokerage firm were actually "Employee's" or "Independent Contractor's" and entitled to what, if any of the claimed tax deductions on their tax returns.

In determining the issue is was neccessary for the government to examine the precise legal wording of the agents aforementioned contracts in order to determine their actural status.

But, what also emanated from that examination and judgement was that the agents were "both contractually employed", but in distinctly different capacities and which was evident in the wording of their employment contracts.

Therefore, a licenced agent who enters into either a valid "Employment Contract" or a "Independent Contractors Agreement" with a brokerage firm, was deemed to be employed and consequently ineligable to receive employment benefits.

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information.

wow, I didn't think it was possible, but I've finally found someone MORE argumentative than myself...Devil's Advocate.

This is from the Texas Workforce Commission. I cannot ever seem to get anyone on the phone.

How Do I Report My Hours Worked and Earnings, If I Work While Receiving Benefits?
If you worked at all during any week for which you request payment, report your hours and total wages before any deductions for that week. Report all of your hours worked and earnings or you may have to repay benefits, may lose the rights to any other benefits in your benefit year, and face prosecution for fraud. The workweek for reporting hours and earnings begins on Sunday and ends on Saturday.

Report the total number of hours worked for each week you worked. You must report your hours and earnings each time you work whether from full-time, part-time, or temporary work including "contract labor," commissions, tips, or self-employment profits. Report your total wages before deductions, including wages earned from any U.S. military service, National Guard, or reservist duties for that week.


Report all earnings for the week in which you earn them, not necessarily when the employer pays you.


Report your total earnings before deductions (gross pay); not your "take home" pay.


Report all your earnings in whole dollars, dropping any cents. For example, if you earn $100.75, report $100.


If you are self-employed, report your profits. Profits are the net amount you made above your expenses.
NOTE: If you use Tele-Serv to request payment, the automated system asks, "Did you work or earn wages of any kind during the claim period?" If you worked, but have no profits to report, answer "Yes," and report zero dollars ($0) earned. Tele-Serv will ask whether you were employed in commission sales or self-employment. Answer "Yes."
How Will Part-Time Work Affect My Payments?
If you work part-time, you may be able to receive some benefits. Your Statement of Benefits tells you your weekly benefit amount and your weekly earnings allowance. Your earnings allowance is one and one quarter times (125% of) your weekly benefit amount. If your actual weekly earnings are less than your earnings allowance, TWC will pay you the difference between the amounts as long as you meet all other requirements, including looking for full-time work. You can receive 25% more income from part-time work and partial unemployment combined, than from unemployment alone. Your benefits also may last longer. If you are working the full-time customary hours for your occupation, you are not eligible to receive UI benefits, even if your earnings are less than 125% of your weekly benefit amount.