[ardentstaffing]

I own a staffing business with my fiancé and I hold a full time position. If I am laid off can I collect unemployment?

The business claims a loss and I do not collect any money from the business currently. Please help!

[Zazonker]

The way you word your question makes it look like you are trying to play some kind of game with the system -- that's fine. It just can make it a little bit difficult to give an answer that will help, and it really doesn't have much to do with Corporate Law.
There are many issues involved. I'll deal with the ones I think might help you the most. Also, unemployment laws differ from state to state, so where you live may make a difference.
A big issue is the actual legal set up for the "staffing business" that you own with your fiancé. Is it a corporation and you are a stockholder? Is it a partnership? What is your position from which you do not collect money? Are you earning money, but not taking it out of the business? What really is this layoff that you are talking about? If you are a 50% owner in the company, for example, pretending to be laid off could actually be conspiracy to defraud. As I said, there's a lot of issues there and I doubt that anyone can help you without more information. Quite likely the answers to these questions would make you ineligible for unemployment, but I don't really know, since I'm guessing about what the answers may be.

On the unemployment side, do you have paid work history in the right time frames to qualify you for unemployment in your state?

All-in-all I'm guessing that you wouldn't be eligible. But, since I'm guessing a bit beyond the 2-liner that you provided, there may be other factors that result in a different answer.

[ardentstaffing]

Z,

I think I was not clear. My business is an LLC and my fiancé are partners.

The full time job is for another company. My business makes money but we took a loss in our first year.

[excon]

If I am laid off can I collect unemployment? The business claims a loss and I do not collect any money from the business currently.

Hello a:

If you are laid off, it doesn't matter that you are an owner of the company. What matters is that you and your employer paid your FICA taxes, and whether your wages were enough during some quarter last year (I don't know which one) which is how they measure your benefits.

If you never drew a paycheck, then you won't get unemployment.

excon

PS> (edited) I just UNDERSTOOD what you said above... The key to getting unemployment benefits is whether you were laid off, and you have wages in the quarter they use to measure. It does NOT matter that you own another company.. One of the requirements for MAINTAINING your benefits, however, is that you are looking for work full time. You can't do that, if you work for yourself.

[Zazonker]

Well, given your clarifications, you've got a little bit of flexibilty in how you represent your situation. For example, if your only financial relationship with your LLC is that you took your share of the loss on your tax return, you might take the viewpoint that your partner runs the business and that you are merely an investor. If you consider yourself employed by the LLC, that could give you problems - even if you are not "currently" collecting money from the company. And, if you would collect money from the company would you do it in a way that appears to be payment for work (employment) or profit from your investment.

A couple of specifics in for California that may be similar in your state.

Several questions on the application for unemployment that may give you some difficulties:

Question 33 asks for your employment history for the past 18 months. -- Your interpretation of your involvement with your LLC would affect how you answer this question. -- hint: if you want to collect unemployment it is best if you are not and never were employed by your LLC.

Question 38 asks "Are you currently self-employed (have your own business or work as an independent contractor) or plan to become self-employed?

Question 39 asks "Are you now or have you been in the last 18 months an officer of a corporation or union or the sole or major stockholder of a corporation?" -- I'm not sure on this one. It seems to me that a "yes" answer would be appropriate. But, an LLC is not a corporation. It seems likely to me that the unemployment people just haven't updated the question since LLCs are relatively new -- but maybe excon has better perspective on this.

Assuming a yes answer on 39, it's likely you'd get put into the "interview" stack rather than the "approval" stack. The people doing the interviewing have quite a bit of power. If the person interviewing is satisfied with your answers, approval will happen. If the interviewer is not happy, your application will either be rejected or go to a review board.

Assuming approval, there is a question on the form that you fill out every two weeks asking if you have earned any money whether or not you were paid.

So, my "unofficial" opinion would be: If you have a career and are in the LLC as an investor to help your partner establish a business, are laid off and are honestly looking for another job in your career field, the answers will result in your application being approved. But, if you are thinking that it is time to leave your career and work with your partner, draw unemployment, and not draw a salary until your unemployment benefits are exhausted, tread carefully.

[excon]

-- but maybe excon has better perspective on this.

So, my "unofficial" opinion would be: If you have a career and are in the LLC as an investor to help your partner establish a business, are laid off and are honestly looking for another job in your career field, the answers will result in your application being approved. But, if you are thinking that it is time to leave your career and work with your partner, draw unemployment, and not draw a salary until your unemployment benefits are exhausted, tread carefully.

Hello Z:

Nailed it!

You were correct earlier too, when you said this had nothing to do with corporate law. The issues we're discussing here verge on criminal law, in that, if the OP lies on her application and gets caught, he/she will be prosecuted.

I think she IS eligible given what we now know. You are correct again, in that HOW she answers the questions is key, and she must be made aware of certain legal and accounting distinctions.

Z,

I think I was not clear. My business is an LLC and my fiancé are partners.

The full time job is for another company. My business makes money but we took a loss in our first year.

Should the OP speak of the business as "hers" as she does here, she'll be denied. If she claims it makes money, she'll be denied.

But, it doesn't make money. She miscasts it as such. It has REVENUE, but no INCOME. Those are terms she needs to get familiar with.

I'm not saying that she can't continue to put in time with "her" business. The employment forms she has to hand in only require about 3 or 4 contacts a week. There's still plenty of time left to contribute to her own enterprise.

I also don't mean to be addressing Z, and not you, Ardent. But, I didn't know how to switch gears. I know a LOT more about law than I do about writing.

excon