SBLS Wins Case Involving Unemployment Benefits, Website and Freelance Work

An Administrative Law Judge ruled in favor of South Brooklyn Legal Services' client, determining that the client's website and freelance work did not constitute ownership of a business and thus did not disqualify him from receiving unemployment benefits.

The Department of Labor’s guidelines state that in order to be
eligible for unemployment benefits, an individual must be “totally
unemployed,” and a person who owns their own business does not qualify.
However, in many cases, the DOL mistakenly finds that a claimant owns a business when in reality he or she is just doing freelance work. In these cases, the DOL
may also find that a claimant made a willful misrepresentation to
obtain benefits by denying having a business, demand repayment of any
benefits already received and/or impose a penalty equal to the value of
two weeks of benefits.

Our client applied for unemployment
benefits after being laid off from a full time job as a video editor.
He periodically did freelance work while looking for full time
employment, and he maintained a website with examples of his work to
show prospective employers. When he applied for benefits, he told the DOL that he did not have a business.

After paying our client benefits for several months, the DOL
determined that he was ineligible for unemployment benefits because he
had a business. This was based largely on the fact that our client had
a website. The DOL decided that he had made
a willful misrepresentation by stating that he did not have a business
and ordered him to repay the benefits he had already collected.

After
a hearing, the Administrative Law Judge determined that our client did
not own his own business. In the decision, the judge recognized that
doing freelance work does not mean that a person owns a business, and
that our client’s website was a legitimate part of his job search. The DOL
retracted the charge that our client had made a willful
misrepresentation and he did not have to repay the benefits he had
already received.