Will getting a contractor license disqualify me from ESD unemployment after no-cause termination?
I just got laid off yesterday with a 'no cause' termination letter. My boss actually told me they won't contest my unemployment claim, which I guess is something. I've been thinking about starting my own construction business for years, and now might finally be the time to make that leap. But I'm worried about my benefits - if I get a contractor license while collecting unemployment, will ESD immediately disqualify me? Does simply having a license count as self-employment even if I'm not actually making money yet? Has anyone gone through this process while on unemployment? I need the benefits to cover my bills while I set everything up, but don't want to risk losing them by getting licensed too soon.
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Josef Tearle
i was in similar situation last year. esd is mainly concerned with if your making money not if you have a license. as long as u report any income honestly u should be ok while starting up. when i talked to esd they said "preparing to start a business" isn't the same as actually working
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Charity Cohan
•That's a relief to hear! Did you actually tell ESD upfront that you were getting licensed, or did you just report when you started making money? I'm nervous about accidentally doing something wrong.
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Shelby Bauman
•This isn't quite accurate. ESD considers you self-employed if you're performing services for your business, even if you're not making money yet. Getting a license is fine, but time spent setting up your business, looking for clients, etc. must be reported as work hours. You also need to still be looking for regular employment and completing your three job search activities each week unless you get an exemption. I would recommend calling ESD directly to explain your situation before proceeding.
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Quinn Herbert
I think wat matters is if ur "able and available" for work. ESD probably wont like it if ur spending all ur time on the business instead of job hunting. My cousin got in trouble last year cuz he said he was looking for work but was actually building his landscaping business full time.
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Salim Nasir
•EXACTLY! The system is designed to TRAP you in wage slavery! Heaven forbid you try to build your OWN business instead of making some corporation rich!!! They'll find ANY excuse to deny you the benefits YOU PAID FOR through your taxes and work history. The minute they find out you're working toward independence they'll cut you off! It's DISGUSTING!
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Salim Nasir
Have you tried calling ESD to ask? Good luck with that!!! I've been trying for TWO WEEKS to get through about my adjudication and the line is ALWAYS busy or they hang up! Spent 4 hours on hold yesterday just to get disconnected when someone finally picked up!
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Hazel Garcia
•I had the same problem last month trying to fix an issue with my claim. Someone recommended I try Claimyr (claimyr.com) to get through to ESD, and it actually worked! They got me connected to an ESD agent in about 30 minutes. They have a video showing how it works: https://youtu.be/7DieNd3C7zQ?si=26TzE_zGms-DODN3. Definitely worth it when you're desperate to get an answer about something important like this.
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Laila Fury
The correct answer is that merely obtaining a contractor license does not automatically disqualify you from receiving unemployment benefits. However, there are several important factors to consider: 1. You must remain able and available for full-time work 2. You must continue completing your 3 job search activities each week 3. Any time spent working on your business (even unpaid) must be reported on your weekly claim 4. If you spend substantial time on your business, it may reduce your benefits proportionally 5. Once you start making income, you must report it accurately I would recommend being transparent with ESD about your plans. Call them and explain your situation. They can provide guidance specific to your case and document your conversation in case any questions arise later. Many people have successfully transitioned from unemployment to self-employment, but careful compliance with reporting requirements is essential.
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Charity Cohan
•Thank you for such a clear explanation! This is exactly what I needed to know. I'll definitely call ESD to document my plans. I'm thinking maybe I should hold off on actually getting the license until my benefits are established, just to avoid any confusion in the system. Would that be a safer approach?
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Geoff Richards
When I got laid off in 2023, I started planning my own business while on unemployment. ESD told me specifically that I could prepare for business (license, business plan, etc) but the minute I started OPERATING (looking for clients, bidding jobs, advertising) I had to report those hours. I ended up doing job search requirements while slowly building my business on the side until I had enough clients to go full time. Just my experience!
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Charity Cohan
•This is super helpful, thank you! That sounds like exactly what I was hoping to do. How many hours per week were you able to spend on business prep without it affecting your benefits? Did you have to track specific tasks?
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Geoff Richards
•They never gave me a specific hour limit, but I kept it to about 10-15 hours a week and always did my job search activities first. I tracked everything just in case I was ever audited. I'd write down what I did (research, paperwork, getting license) and hours spent. When I started actually looking for customers, I reported those hours on my weekly claim and my benefit was reduced proportionally. Better than losing it entirely!
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Josef Tearle
my brother got his contractor license while on unemployment last year and he said it was fine because he was still applying to jobs. but when he started his first project he told esd and they reduced his weekly amount. i think its all about being honest with them
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Shelby Bauman
One other important consideration: if you're planning to use the Self-Employment Assistance Program (SEAP) through WorkSource, you need to apply for that specifically. It allows you to work full-time on your business while receiving unemployment, but you must be accepted into the program first. Not everyone qualifies, but it's worth looking into if you're serious about starting your construction business. The program includes training and resources for new business owners as well.
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Charity Cohan
•I had no idea this program existed! This sounds perfect for my situation. Do you happen to know how competitive it is to get accepted into SEAP? And how long the application process typically takes? I'll definitely look into this right away.
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