Working side hustle doesn’t stop eligibility for unemployment benefits

In a recent unemployment compensation benefit decision, the Pennsylvania Commonwealth Court has concluded that participating in the “gig-economy” doesn’t necessarily constitute self-employment.

Recent case: Donald lost his job as a behavioral health specialist and applied for unemployment benefits. In Pennsylvania, the rule has long been that if someone who is collecting benefits becomes self-employed, he or she is no longer eligible for the benefits.

Donald was approved to receive unemployment compensation benefits. Around the same time, he also began working as an Uber driver. When Donald’s driving gig came to light, his eligibility for unemployment was rescinded. He appealed.

The Commonwealth Court had reinstated Donald’s benefits. It concluded that driving for Uber wasn’t genuine self-employment, but was more akin to trying to make a few dollars on the side while seeking full-time employment. (Lowman v. Unemployment Compensation Board of Review, Commonwealth Court, 2018)

Final note: Think twice before seeking to cut off unemployment compensation benefits if you discover a former employee is driving for Uber, doing chores for TaskRabbit or renting out part of their home as a vacation rental on Airbnb. While these sort of part-time jobs may seem like engaging in self-employment, unless workers appear to be making a considerable investment in the enterprise, chances are they won’t lose eligibility.

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