Can you collect unemployment while starting a business in NYS?
I got laid off from my marketing job last month and have been thinking about finally starting the consulting business I've been planning for years. My unemployment claim was approved and I'm getting my weekly benefits, but I'm worried about what happens if I start working on my business while collecting. Can I legally start a business while on unemployment in New York? I don't want to mess up my benefits but this might be the perfect time to get things going. Has anyone done this before?
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Mateo Rodriguez
Yes, you can start a business while collecting unemployment in NY, but there are specific rules you need to follow. You must report ANY income you earn from the business on your weekly claims, even if it's just $1. The key is staying under the partial benefit threshold each week. You also need to remain available for full-time work and continue your job search activities. The NYS Department of Labor has a Self-Employment Assistance Program (SEAP) that might be worth looking into for your situation.
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Nia Thompson
AuthorThank you! I hadn't heard of SEAP before. Do you know if there's a waiting period or application process for that program?
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GalaxyGuardian
I tried this last year and it got complicated fast. You have to be really careful about how you report business income because they consider any work you do for your business as work hours, even if you don't make money yet. I ended up having issues because I was spending 30+ hours a week on my startup but only made like $200 the first month.
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Aisha Abdullah
This is exactly why the SEAP program exists - it allows you to work on your business full-time without the usual job search requirements. But you have to get approved for it first, and there are limited spots available each year.
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Ethan Wilson
Whatever you do, DON'T try to hide any business activity from NYS Department of Labor. They WILL find out eventually and then you'll owe back everything plus penalties. Been there, done that, learned the hard way.
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Nia Thompson
AuthorYikes, that sounds terrible. How did they find out in your case? I definitely want to do everything above board.
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Yuki Tanaka
I've been trying to get through to NYS Department of Labor for weeks to ask about this exact situation and can never get anyone on the phone. The hold times are insane and half the time I get disconnected. Has anyone found a better way to reach them? I'm in the same boat as OP and need to talk to someone who actually knows the rules.
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Mateo Rodriguez
I had the same problem until I found Claimyr. It's a service that helps you get through to NYS Department of Labor agents by phone. They have this video demo at https://youtu.be/qyftW-mnTNI that shows exactly how it works. I was able to speak with someone within a day about my business questions. Check out claimyr.com - it was a lifesaver for me when I couldn't get through the regular way.
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Carmen Diaz
wait so if i'm doing like freelance work while unemployed thats the same thing as starting a business?? i've been doing some graphic design gigs and reporting the income but nobody told me there were special rules about being available for work
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Mateo Rodriguez
Freelance work and starting a business are treated similarly by NYS Department of Labor. The main thing is that you're reporting all income and remaining available for full-time employment. If your freelance work is taking up so much time that you can't accept a full-time job offer, that could be an issue.
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Andre Laurent
The system is so confusing honestly. I've been collecting for 8 weeks and still don't understand half the rules. Good luck OP, hopefully someone here can give you better guidance than the NYS website does!
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Harper Collins
I'm in a similar situation - got laid off from my tech job and considering freelance web development while on unemployment. From what I've researched, the key things to remember are: 1) Report ALL income from any business activity, even if it's just $50, 2) You still need to be actively job searching and available for full-time work, 3) Keep detailed records of your hours and earnings. I've been documenting everything in a spreadsheet just in case they audit later. The SEAP program mentioned above sounds promising - I'm going to look into that too. Thanks for asking this question, it's really helpful to see everyone's experiences!
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