1099 contractor hours - are they reported to ESD or do I need to track them myself?
I've been working as a 1099 contractor for about 8 months now, getting paid hourly for website development work. I'm a bit confused about how this impacts my potential unemployment eligibility down the road. Does my current employer report my hours to the ESD? Or am I supposed to be reporting them somewhere myself? I want to make sure if I ever need to file for unemployment in the future that there's a record of my work history. I've never collected unemployment before so I'm trying to understand how this all works for independent contractors. Thanks for any help!
12 comments
LongPeri
As a 1099 contractor, your hours aren't reported to ESD by anyone. Your client doesn't report your hours because you're not an employee - they only file a 1099 form with the IRS showing your total earnings. Self-employed individuals (which is what you are as a 1099 contractor) typically aren't eligible for regular unemployment benefits because you don't have employers paying into the unemployment insurance system for you. However, it's still good to keep detailed records of your hours, clients, and earnings for tax purposes and in case special programs become available (like during COVID when self-employed people could get benefits through special programs).
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Freya Collins
•Wait, so I can't get unemployment at all as a 1099 worker? What happens if my contract suddenly ends and I have no income?
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Oscar O'Neil
The previous comment is correct - as a 1099 contractor, you're considered self-employed, and your clients don't report your hours to ESD. Traditional unemployment insurance is based on W-2 employment where employers pay into the system. If you want to qualify for regular unemployment benefits in the future, you'd need to have W-2 employment. Some people maintain part-time W-2 jobs alongside their contract work to maintain eligibility. Keep ALL your records though - hours worked, payment amounts, contracts, etc. While regular UI may not be available to you, Washington state has occasionally had programs for self-employed individuals during economic downturns.
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Sara Hellquiem
•Would it be worth it to form an LLC and pay myself as a W-2 employee? I heard some freelancers do that to get unemployment eligibility
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Charlee Coleman
i was on 1099 for years n tried to file when work dried up last yr... TOTAL NIGHTMARE!! esd kept sayin i wasnt eligible cuz no employer paid into the system. i tried explainin i had been payin self-employment taxes but they didnt care. spent WEEKS tryin to get thru to someone who understood my situation but the phone lines were always busy or id get disconnected after waitin for hours finally used a service called Claimyr to get through to an actual human at ESD (claimyr.com) - they have a demo vid that shows how it works: https://youtu.be/7DieNd3C7zQ?si=26TzE_zGms-DODN3 the agent finally explained that as a 1099 worker i needed to have W2 wages somewhere in my base year to qualify. wish someone had told me that BEFORE i spent weeks stressing!
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Freya Collins
•That sounds incredibly frustrating! I'll check out that service if I ever need to get through to ESD. So basically what I'm hearing is I should try to get some W-2 work on the side if I want unemployment protection? Even if it's just part-time?
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Oscar O'Neil
Yes, even part-time W-2 work would establish some eligibility, though your benefit amount would be based on those W-2 earnings only, not your 1099 income. Remember that to qualify for UI in Washington, you need to have worked 680 hours in your base year (which is the first four of the last five completed calendar quarters before you file). Another option some contractors consider is paying for private unemployment insurance, though it's typically expensive compared to the state system.
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Liv Park
•what about that new portable benefits bill they were talking about for gig workers? Is that a thing yet or still just talk???
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LongPeri
The portable benefits legislation for gig workers is still in development - nothing concrete has been implemented yet that would help 1099 contractors qualify for unemployment in Washington. It's been discussed for years but hasn't made it through as actual policy. One additional thing to mention: some companies misclassify workers as 1099 contractors when they should legally be W-2 employees. If you work set hours, use their equipment, work on-site, and they control HOW you do your work (not just the end result), you might actually be misclassified. In that case, you could potentially file for unemployment and request an investigation into your employment status. But that's a lengthy process with no guaranteed outcome.
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Leeann Blackstein
•THIS!! 👆 I was "1099" for a tech company that treated me EXACTLY like an employee - set hours, their equipment, had to be in their office, had a manager, etc. When they let me go I filed for unemployment anyway and explained I thought I was misclassified. ESD investigated and I ended up getting benefits! Took FOREVER though and the company fought it hard.
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Ryder Greene
i think everyone's missing something important here - even if u cant get regular unemployment as 1099, u should STILL KEEP DETAILED RECORDS of all ur work!! dates, hours, clients, contracts, everything!! during covid they had PUA for self-employed ppl & having good records made it WAY easier to prove ur income. who knows what other programs might come along in the future? better to have the records & not need them than need them & not have them!!
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Freya Collins
•You're absolutely right - I'm definitely going to start keeping better records regardless. I have most of my invoices but I should probably create a more organized system for tracking everything. Thanks for the advice everyone!
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