On Unemployment Insurance

At least in Virginia, the unemployment insurance process combines all the worst parts of filing taxes and renewing your driver’s license. The rules are highly technical, the instructions are exceedingly generic (having to apply to an entire range of people, from paupers to CEOs, who interface with the employment commission in several different ways, including in person and online), and overall not a lot of fun. What’s more, the way unemployment insurance is structured isn’t necessarily optimized for those of us who can and do acquire freelance work.

Briefly, for those that don’t know the rigmarole involved in the unemployment dance, an involuntarily unemployed individual can go online and apply for unemployment insurance payments. Once you apply, the relevant government agency sends you a notice telling you how much money you are entitled to each week, which in Virginia is a maximum of $378. What’s that? Not enough to pay your mortgage? Well, hopefully you are married and your spouse has some income, because that is the most you can get in Virginia.

Once you are initiated in to the club of the government supported non-worker, you have to satisfy some requirements to get your payments. I’m sure this is much easier these days, where you can just go online to both apply for jobs and submit your weekly updates to the employment commission. I can’t imagine having to spend my day running around to apply for jobs and then waiting in line at some government office to prove that I did so.

The VEC will not tell you specifically how many jobs to apply for each week. The lovely woman I spoke to on the phone back in November said they avoid telling people a concrete minimum because they want non-workers to apply to as many jobs as necessary to get employed as quickly as possible. From what I can tell, the magic number is three. One problem I ran into applying for jobs is that you need to have a mailing address to get credit for applying for the job. Unfortunately, with so many applications online and with more and more virtual companies lacking strong physical presence, it can be difficult to find an address. I applied for one job and politely received an email that they had already filled the position. But, the company didn’t disclose their physical address anywhere I could find, so I wrote them asking for their address in order to fulfill my unemployment requirements. Can you hear the crickets chirping? I received no response whatsoever.

Additionally, any jobs you apply or interview for through staffing agencies do not count. Basically the system is set up to get you to apply to a bunch of jobs you know you won’t get but that are easy to find and apply for and easy to submit to the employment office. If you get the requirements out of the way in a few minutes on Monday, you can spend the rest of the week looking for an actual job, which often involves things that the employment commission doesn’t see as looking for work.

The other bit of information you have to supply to the employment office every week is the amount of money you earned doing freelance or contract work. After the first $50, they deduct the money from your unemployment insurance payment. Now, I don’t want to brag about my community college accounting course (I did get an A!), but hopefully you are familiar with the difference between cash-based and accrual-based accounting. Basically, many businesses, and apparently the VEC, operate on an accrual basis: cash and expenses are booked when the are earned or incurred, not when the money actually changes hands. Of course, life operates on a cash basis: it doesn’t matter what you earned if you don’t have the money to pay your bills.

Basically, unemployment is just not set up to help float you between the end of your regular paycheck and the beginning of your freelance money. And it also isn’t helpful to bridge the gap between freelance checks. The bottom line is, if you can earn $378 a week (in Virginia, anyway), you may not want to spend the time jumping through unemployment hoops, and instead may want to concentrate on earning as much money as you can in any way that you can.