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Can I Start a New Business while Collecting Unemployment?



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Unemployment compensation is a state-run system that allows individuals who were let go from a job to recover a portion of their weekly earnings while they search for a new job. Being a state-administered program, each state maintains its own rules concerning unemployment benefits. So, if you are collecting unemployment from your state, are you permitted to start your own business and still collect benefits?

Starting your own business while collecting unemployment benefits could affect your eligibility if you make money from the business. A person who accepts a part-time job while collecting weekly benefits must report the income to the state unemployment office. The result will be a reduction of the unemployment benefits in an amount equal to the income from the part-time job.

Aside from the issue of money earned from a business affecting eligibility for benefits, another issue with a new business is one of time. The time you devote to starting your new business takes away from the time you should be spending looking for a job. Officials at unemployment could also view your new business as a job and determine that you are now working and no longer eligible for benefits.

The bottom line is that earning money from a new business can impact your ability to collect unemployment. If it is just a hobby and there is no money being made, in theory, it would not be much of an issue. However, it is something that you need to approach with caution. It might be wiser to wait until you find employment to launch the new business.

If you would like more information about this topic or have general legal questions, please feel free to contact me at (201) 904-2211 or via email at pl@pjlesq.com. We answer legal questions on a daily basis and would be happy to discuss any issues or questions that you have with you. #askpjlesq © 2017, Law Offices of Peter J. Lamont & Associates. This Update is provided for informational purposes only. It is not intended as legal advice nor does it create an attorney/client relationship between the firm and any readers or recipients. Readers should consult counsel of their own choosing to discuss how these matters relate to their individual circumstances. This Update may be considered attorney advertising in some states. Furthermore, prior results do not guarantee a similar outcome.

#insurance #unemployment #startabusiness #smallbusiness #formation #entrepreneur

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