Can I start my own business while receiving ESD benefits? Self-employment reporting questions

You absolutely CAN start a business while on unemployment, but you need to be careful about how you report it. When you file your weekly claim, you'll need to report ANY hours spent working on your business, even if you don't make money. ESD considers time spent on business development as "work" even without income. They'll reduce your benefit based on hours worked, not just income received. If you work 17+ hours in a week on your business, you likely won't receive any benefits for that week, regardless of whether you earned anything. You'll also need to remain "able and available" for full-time work and continue active job searching (3 job search activities weekly). Starting a business doesn't exempt you from the job search requirements.

i did this last year!! big mistake not reporting the hours i spent on my etsy shop setup. ended up with a $2890 overpayment notice 6 months later because i didnt know i had to report hours even tho i wasnt making $$$. theyre serious about this stuff!!

You need to understand the difference between "creating a business" and "actively working on business activities." Phase 1: Planning, research, building a website after hours - this generally doesn't count as work hours while you're still applying for jobs and available for interviews. Phase 2: Actually pursuing clients, doing billable work, marketing during business hours - this DOES count as work and must be reported on weekly claims. Be extremely precise in your weekly claims. Report ANY hour spent actively pursuing business during normal work hours. This is where most people make mistakes. If you're spending your day cold calling potential clients instead of applying for jobs, that's work time that reduces benefits. Also, document EVERYTHING so you can defend yourself if questioned later.

There's a bit of nuance here that's important. ESD's official stance is that ALL hours spent on self-employment activities should be reported. However, in practice, there is some gray area around pure planning/research versus active business operations. The safest approach is to report all hours. But many people interpret "work" as direct revenue-generating activities. If you want a definitive answer straight from ESD, you should call them directly, but good luck getting through. I've been trying to reach them for weeks about my adjudication issue.

The law says you must report ANY work performed, whether paid or unpaid. Its not about whether you GET income, its about whether you're TRYING to get income. ESD considers ANY time spent trying to make money as work hours that must be reported.

Different perspective: I started my coding business while on unemployment and just didn't report the startup hours because I wasn't making money yet. Once I got my first paying client, THEN I started reporting. Never had any issues. Sometimes the rules are more flexible than people make them sound...

Thank you all for the helpful information! After reading everyone's responses, I think I'm going to: 1. Limit my business development to 5-10 hours per week to minimize the impact on my benefits 2. Report ALL hours spent on the business honestly on my weekly claims 3. Continue doing my 3+ job search activities each week 4. Try to reach an ESD agent directly to confirm this approach I might use that Claimyr service someone mentioned to get a definitive answer from ESD. Better to get it right from the start than deal with overpayments later. I'll update this thread once I talk to someone official.