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PA UC examining my freelance work - confused about employee vs contractor status affecting my benefits

I lost my main job last month and applied for unemployment. My former employer isn't contesting anything, but now I'm stuck with an 'open issue' because I mentioned my occasional freelance writing gigs during the application. PA UC called today asking confusing questions about whether I'm 'free from direction and control' in my freelance work. I write articles on assigned topics but create the content independently - no formal evaluations or supervision. The examiner said if I'm 'free from direction' I could be classified as self-employed and potentially disqualified! But I'm NOT self-employed - this is just side work that pays maybe $400-600 monthly compared to my full-time salary of $4,200. Then she mentioned if I'm considered a regular employee of the freelance company, there might be OTHER issues. She's forwarded my case to their tax department after requesting my 1099 from 2024. I'm completely lost. How should I have answered these questions? What classification (employee vs contractor) is better for my unemployment claim? Will I lose benefits entirely because of occasional freelance work? This process is making an already stressful situation so much worse.

Dmitry Petrov

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I went through something similar last year. The way PA UC handles side gigs is incredibly confusing. From my experience, if they determine you're an independent contractor for your freelance work, they'll still approve your benefits based on your W2 job, but you'll need to report your freelance earnings each week which will reduce your weekly benefit amount. If they determine you're an employee of both companies, it gets more complicated with combined wage calculations. Based on what you described (project-based work, creative freedom, no supervision), you sound like a legitimate independent contractor. Make sure they understand the SCALE difference between your main job and this side gig. The key is to emphasize that your freelance work is irregular, not guaranteed, and significantly less than your main employment.

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Thank you so much for explaining this! I wish the examiner had been this clear. So basically either classification could still result in benefits, just calculated differently? I definitely emphasized the huge pay difference and irregular nature of the freelance work. I'm just worried they'll deny me completely because I said I have creative freedom.

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StarSurfer

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They make these questions intentionally confusing to trip ppl up i swear. i had a etsy shop that made like $50 a month and they acted like i was running amazon or something lol. took FOREVER to get my claim approved

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Ava Martinez

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SAME HERE but with doordash! The system isnt designed for the modern economy where everyone has multiple income streams. The rules were written when people just had ONE job their whole life 🙄

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Miguel Castro

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Here's what's happening: PA UC is determining whether your freelance work makes you ineligible for benefits under their self-employment rules. The key test factors are: 1. Control and direction - who decides HOW you do the work 2. Whether the work is part of the company's regular business 3. If you're independently established in that business For UC purposes, being classified as an independent contractor is generally BETTER in your situation. If they classify you as an employee of the freelance company, they may combine wages from both employers, potentially complicating your claim or even creating an eligibility issue if you're still technically "employed" by them. Your best approach is to emphasize: - The freelance work is minimal compared to your full-time job - The work is irregular/inconsistent - You report this income on 1099s, not W2s - You don't receive employee benefits from them Be prepared that they might reduce your weekly benefit amount based on any freelance earnings you report.

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This is incredibly helpful - thank you! I definitely made clear the irregular nature and huge income difference. I just got confused when she kept pressing for yes/no answers about supervision when it's more nuanced than that. They have my 1099 now, so hopefully that helps clarify things. Do you know how long these determinations typically take?

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I'm in the EXACT same situation right now and it's infuriating!!! Lost my teaching job but I tutor a few hours a week. Been waiting 5 WEEKS already because of this stupid "investigation" into my tutoring. Like sorry for trying to make a little extra money on the side?? UC system is broken!!

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Connor Byrne

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5 weeks?? That's ridiculous! Have you tried calling them? I know it's almost impossible to get through on the phone lines...

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I've called LITERALLY 37 times (yes I counted). Either busy signal or disconnected after waiting on hold for an hour. This system is designed to make people give up.

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Yara Elias

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After weeks of dealing with busy signals and disconnections trying to reach PA UC about my side gig situation, I finally found a service called Claimyr that got me through to an actual agent in less than 2 hours. They have this system that holds your place in line and calls you back when an agent is available. Saved me days of frustration! You can see how it works at claimyr.com or check their demo at https://youtu.be/CEPETxZdo9E?si=WL1ZzVZWG3KiHrg2 The agent I spoke with clarified that my freelance photography doesn't disqualify me as long as I report earnings correctly. Might be worth trying to get specific answers about your writing gigs instead of waiting for weeks.

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That's really helpful - thanks! I'll definitely check that out. At this point I'm willing to try anything to get some clarity. Did they reduce your benefits because of your photography income?

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Yara Elias

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Yes, they reduce my weekly benefit by whatever I earn from photography that week (minus a small deduction they allow). But the important thing is I still GET benefits, which is way better than being completely disqualified!

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Dmitry Petrov

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Quick follow-up on my earlier comment - make sure you understand the partial benefit calculation. In PA, you can earn up to 30% of your weekly benefit rate without reduction. Anything over that gets subtracted dollar-for-dollar from your benefit amount. So if your weekly benefit is $600, you can earn up to $180 from freelancing without any reduction. If you earned $250 that week, they'd subtract $70 from your benefit ($250-$180=$70), so you'd get $530 instead of $600.

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This is super helpful! I didn't realize there was a 30% threshold before they start reducing benefits. That actually makes me feel better since some weeks I don't do any freelance work at all, and other weeks it might be just $150-200.

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Ava Martinez

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I think ur overthinking this. Just report ur freelance income each week when you file and they'll adjust ur payment. They might ask for more verification but as long as ur honest about everything it should work out fine. The main thing they care about is that you're available for full-time work and not turning down job offers.

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Except they put a HOLD on your entire claim while they "investigate" which can take MONTHS! Meanwhile bills are piling up and you're getting collection notices. It's not as simple as "just be honest" when the system is broken.

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Ava Martinez

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True, the delays are awful. But falsely answering questions to avoid investigation will only cause bigger problems down the road with potential overpayment notices or fraud accusations. Better to deal with the delay now than repayments later.

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Miguel Castro

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Just to add some clarity: Pennsylvania follows the "ABC Test" for determining employment status. For you to be considered an independent contractor, PA UC needs to establish that: A) You are free from control and direction B) Your service is performed outside the usual course of business of the company C) You are customarily engaged in an independently established trade or profession Based on your description of the writing work (creative freedom, project-based, no formal evaluation), you likely meet criterion A. If the company's main business IS publishing/content creation, you might fail criterion B. For criterion C, they'll look at whether you market your services to others, have your own business identity, etc. Make sure your answers are truthful but framed in a way that accurately represents the independent nature of your relationship with this client. The examiner's questions were trying to fit complex working arrangements into rigid yes/no categories.

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Thank you for this detailed explanation! The company primarily does business coaching, and I write content for their blog/newsletter as an add-on service. I've also written for other clients in the past, so hopefully that helps with criterion C. This makes the examiner's questions make more sense now.

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