During the past few days there have been several diaries on the subject of unemployment benefits. Some individuals have contributed comments stating that they were never able to obtain any benefits because of their 1099 work status. I am an not an attorney and this diary is not to be construed as legal advice. I would like to present information, however, that might help some 1099s get their benefits.
The determination of whether a worker is an employee or an independent contractor is based on state and federal laws and tax regulations. It is not soley determined by the individual and his or her employer. There is a list of questions that have to be answered. A worker who was forced to be a 1099 has the right to challenge one's 1099 status with the state labor department and with the IRS.
If you request a hearing on whether you were a 1099 or an employee, the determination will based on questions such as:
Did you work at the employer's site?
Did the employer determine your hours?
Did the employer control the manner in which the work was performed?
Did you have a supervisor at the employer's site?
Was this your only 1099 job during that period of time (i.e. you did not have other clients)?
Did you never advertise your services as a small business?
Did you never print business cards as a small business?
If the answer to the above questions is yes, you will very likely obtain a determination that you were an employee and you will be able to obtain unemployment conpensation benefits. It is unlikely that the employer will show up at the hearing or answer the phone for a telephone hearing. You will be able to file your state tax return as an employee and not an independent business.
The federal procedure for challenging a 1099 classification is not related to unemployment benefits. It is only for tax purposes. You can choose to do nothing or file an SS8 claim. If you win the SS8 claim, you will not have to pay self employment taxes and the employer will have to pay the taxes. If you already paid self-employment taxes you will get a refund.
This does not solve the problem of all 1099 not having access to unemployment benefits, but anyone who was really an employee and classified as a 1099 does have some rights in the situation. A legal aid attorney can be helpful, but the process is easy and straightforward enough that you do not need an attorney.
Of course, you may lose recommendations from the employer, but if the choice is survival with benefits and a tax refunds, the issue of a recommendation may be less important. You might not lose a recommendation if the employer does not care.