How to Work as an Unemployment Compensation Consultant

If you are currently unemployed or underemployed or want to serve those who are, consider working as an unemployment compensation consultant. The unemployment compensation system is made up of a combination of state and federal programs that cover people who are without jobs or underemployed. There are often complex and unexpected interactions among the various programs, and many people who are unable to understand it, and as a result, lose benefits for which they are eligible. As an unemployment compensation consultant, you could cover not only the regular state and federal benefits extensions, but also special programs that are handled differently, such as disaster relief assistance, unemployment for ex-military service members, programs for workers displaced as a result of U.S. trade policy and unemployment that covers people transitioning from employees to self employed.

Instructions

1. Evaluate your own case first. If you are unemployed yourself when you start your business as an unemployment compensation consultant, speak to someone in your state unemployment office to make sure you don't jeopardize your unemployment benefits. For example, to continue to collect unemployment benefits you must be available to work during the normal business hours of your profession. So you will probably have to limit the hours of your consulting business to after normal business hours so that it doesn't interfere with your regular job search or your ability to work if you find a job. Talk to someone in your state's office before you start anything new to see if you will still be able to collect full or partial unemployment benefits

2. Talk to a professional about what kind of business entity to form for your consulting business. The right business entity, such as an LLC or an S-corporation, will make your business seem professional and will limit your personal liability in the event of lawsuits. It will also allow you to deduct business expenses from your earnings.

3. Even if you specialize in a particular state or region, learn about the basic programs throughout the country, especially in the states that have different policies. Being well informed will give you credibility and will make it easier to expand your business later. For example, Michigan is very reluctant to allow unemployment extensions. A few states have special programs that allow people to collect unemployment benefits while working on developing their own businesses instead of looking for a job. Learn about special legal issues that might affect your clients, such as court rulings in California and Oregon that certain contractors are misclassified as self employed when they should be considered employees who are eligible for unemployment benefits. Learn about interstate agreements regarding unemployment benefits, and agreements between the U.S. and Canada.

4. Examine each person's case carefully before you give them advice. There are sometimes un-intuitive consequences to intermittent work histories. For example, someone who last worked full time in 2006 and has been unemployed since then may be eligible for greater benefits than someone who has worked sporadically since then. This is because unemployment benefits extensions are based on your most recent eligible work history.

5. Stay up to date with changes in federal legislation and state policies. Federal unemployment extensions are granted only during times of financial crisis and when unemployment rates are high. They must be renewed by the federal government to remain in effect. States have their own laws regarding additional extensions, which are also dependent on the financial climate. New programs are added by the federal and state governments in response to national and state changes to the structure of the workforce.

Tips & Warnings

• Avoid trying to exploit complicated loopholes and stay away from grey areas of the law. Doing business that way could destroy your credibility and make you vulnerable to civil and criminal prosecution.

References

• United States Department of Labor: Unemployment Insurance
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