Can I start a business while on unemployment in Washington - ESD rules?

Thanks! So I can work on the business as long as I'm still actively looking for regular employment? Do I need to tell Washington ESD that I'm starting a business or just report income when it happens?

You only need to report actual income when you earn it, but make sure you're documenting your job search activities properly. The business work can't interfere with your availability for interviews or accepting job offers.

Did you have any issues with Washington ESD questioning your availability for work?

nope, as long as i kept applying for jobs and was available for interviews they didn't care. just be honest about everything

This is exactly why I used Claimyr when I had questions about working part-time while on benefits. Their service at claimyr.com helped me get through to an actual Washington ESD agent who explained everything clearly. Way better than trying to call for hours. They even have a demo video at https://youtu.be/7DieNd3C7zQ showing how it works.

That's actually smart - getting official clarification from Washington ESD is definitely the way to go rather than guessing about the rules.

Do you know where exactly in the handbook it talks about starting a business? I've been trying to find the specific rules.

It's in the section about reporting work and earnings. They don't have a separate section just for business owners, it falls under the general work reporting requirements.

I totally understand the confusion! The key is just being transparent about everything. Report any income when you make sales, keep track of your business expenses, and make sure you're still meeting the job search requirements. An Etsy shop shouldn't be a problem as long as you're honest about it.

ok that makes me feel better. i just dont want to accidentally do something wrong and have to pay everything back

That's really helpful! So I should track all my startup costs and ongoing expenses?

Exactly. Any legitimate business expense can be deducted from your gross earnings when calculating what to report to Washington ESD.

I don't think it's about penalizing entrepreneurs. The system is designed to support people who are temporarily unemployed and looking for work. If someone is running a successful business, they probably don't need unemployment benefits.

but what if the business takes months to make money? people still have bills to pay in the meantime

That's exactly what the partial benefit system is for - you can earn some money from your business and still get reduced unemployment benefits.

Good point. I've been keeping a log of all my applications and networking contacts.

That's encouraging! Did he have to register the business officially or could he just start doing the work?

He got a business license pretty early on, but I think you can start before that as long as you report any income. The business registration is more for tax purposes and liability protection.

Never heard of Claimyr before but that sounds useful. Is it expensive?

I don't remember the exact cost but it was worth it to get clear answers instead of worrying about doing something wrong. Check out claimyr.com if you're interested.

Good advice. I'll start a spreadsheet to track everything.

That's smart. Organization is key when dealing with any government benefits program.

It would be reported as work since you performed services to earn that money. Even if it's your own business, it's still considered work for unemployment reporting purposes.

ok that makes sense i guess. this stuff is so complicated

That's an interesting point. I hadn't thought about how the business might actually help with networking and finding other opportunities.

How did you handle it when the business started making more money? Did you transition off unemployment gradually?

Yeah, as my business income increased, my unemployment benefits decreased proportionally. Eventually I was making enough that I didn't qualify for any benefits and transitioned completely to self-employment.

Definitely planning to be completely honest about everything. Better safe than sorry.

That's clever! I've been going to some industry meetups that could definitely count as networking for job search purposes.

Exactly! Just make sure you're documenting them properly in your job search log.

How long did it take to get through using their service?

Much faster than trying to call myself. They handle the waiting and connect you when an agent is available.

Thanks everyone for all the advice! I feel much more confident about moving forward now.

That's really helpful to know the specific numbers. Makes it easier to plan.

Yeah, and anything you earn over that $5 threshold gets deducted dollar for dollar from your benefits. So if you earn $50, you'd get $50 less in unemployment that week.

That's probably a good investment, especially for tax planning.

Definitely. They can also help you understand what business expenses are deductible for unemployment reporting vs tax purposes, which aren't always the same.

This is really practical advice! I like the idea of framing it as "freelance consulting" - that probably does sound less like I'm trying to build something that would compete with regular employment. Did you find that Washington ESD agents understood the difference, or did you mostly just use that language on your weekly claims?

That's really smart framing! I never thought about how the terminology might make a difference when talking to Washington ESD. Did you have to register as a business officially or were you able to just operate as freelance consulting without all the formal paperwork initially?

This is exactly the kind of detailed advice I was looking for! I really appreciate you sharing your actual experience. The spreadsheet idea is great - I was wondering how detailed I needed to be with tracking everything. And you're right that making more than my UI benefit is definitely a good problem to have! Did you end up transitioning fully to the consulting work or find a traditional job? I'm curious how it all worked out in the end.

This is super helpful! I'm the original poster and your experience gives me a lot of confidence. The "freelance consulting" framing is brilliant - it sounds way less threatening than "starting a business" while still being honest about what I'm doing. I love the detailed tracking approach too. Quick question - when you said you made sure your business activities were flexible, did you actually turn down business opportunities because of potential conflicts with job interviews, or was it more about just being mentally prepared to prioritize interviews if they came up?

This is such solid advice! I'm actually in a similar boat - been on unemployment for about 2 months and considering some freelance work in my field. Your point about keeping everything flexible is really smart. I've been worried about how to balance pursuing income opportunities while still being genuinely available for full-time positions. Did you find that having the consulting work actually helped with networking and finding job leads, or was it mostly separate from your main job search efforts? Also really curious about the spreadsheet setup - did you track hours even for unpaid business development time like proposals and marketing?

This is incredibly helpful! I'm actually in a very similar situation - about 8 weeks into unemployment and starting to explore some consulting opportunities in my field. Your point about framing it as "freelance consulting" is genius - I can see how that would sound much less alarming to Washington ESD than "starting a business." I'm definitely going to set up a detailed spreadsheet like you mentioned. One question - when you were tracking hours worked, did you include time spent on things like writing proposals or doing unpaid business development, or just the actual billable client work? I want to make sure I'm reporting everything correctly from the start. Also, did you ever have situations where you had to choose between a potential consulting project and being available for job interviews? I'm trying to figure out how to balance both priorities without messing up my unemployment claim.