Self-Employment Disqualification for Unemployment Compensation - COTW #128

The Pennsylvania Commonwealth Court gave us a helpful reported unemployment compensation opinion in Lello v. UCBR.

Generally, an unemployment compensation claimant in Pennsylvania is ineligible for benefits if he or she is "self-employed." However, there is an exception for "sideline" activity if the employee satisfies the Kress test:

(1) the self-employment began prior to the termination of the individual’s full-time employment;

(2) the self-employment continued without substantial change after the termination;

(3) the individual remained available for full-time employment; and

(4) the self-employment was not the primary source of the individual’s livelihood.

The Lello opinion provides a nice analysis of the self-employment UC issue. The case also emphasizes that the focus of the second prong is the amount and nature of the work performed - not the amount of income (if any) earned.

Lello was performing some freelance Internet work prior to his termination, but he wasn't getting paid. After his termination, he began receiving income but still did the same type of work and for the same few hours a week. Thus, he was eligible for benefits.