Pennsylvania Unemployment Law: Taking Part-Time Work as an Independent Contractor

You are receiving $500 per week in Pennsylvania Unemployment Benefits and have been offered part-time work as an independent contractor, paying you $200 per week.  You understand that if you earn 40% or less of your weekly Unemployment Benefit rate doing part-time work, your Unemployment Benefits will not be affected.

You take the job and over the next 3 months, you faithfully report your $200 per week of earnings to Unemployment.  You continue to receive your $500 per week in Unemployment Benefits.

Suddenly, you are informed that you are disqualified from future Unemployment Benefits. You are told further that you engaged in fraud, and must pay back all of the Unemployment Benefits you received over the past 3 months, with penalties.

What on God's Green Earth has happened?

The Unemployment Service Center reviewed your account and determined that you had no reported earnings over the past 3 months.  It deduced therefore that you had been working as an independent contractor.  It concluded that you engaged in fraud because, although you did report your earnings, you failed to advise it that you were working as an independent contractor, an automatically disqualifying event where Unemployment Benefits are concerned.  

Do not be unduly alarmed.  Appeal the overpayment determination promptly, simply stating "I disagree with the determination."  Then, seek out counsel to assist you.  

John A. Gallagher is an employment lawyer who represents employees in Pennsylvania.

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