“Can I collect unemployment – and work for Uber?”  Pennsylvania’s rules on gig work

Unemployment compensation can allow a terminated employee get paid a portion of their former salary for 26 weeks to help put food on the table or pay the mortgage between jobs.

Unfortunately, getting a job can be a slow process, and unemployment compensation doesn’t always cover expenses.

Extra income doing “gig” work can help fill the gaps and allow the unemployed to network. And flexible, new economy companies like Uber make that possibility a reality.

But does collecting extra income – even a small amount, irregularly – mean risking unemployment benefits?

Despite what Uber and Lyft report on their websites, Pennsylvania residents need to tread carefully if they don’t want to lose their benefits.

So if you’re considering picking up gig work, contact us for information on your particular circumstances. Read below for a summary of the state’s guidelines on collecting extra paychecks.

Independent contract work is risky

Working as a part-time employee will not risk unemployment benefits. You may work part-time and earn up to 30 percent of your weekly benefit rate in each claim week before your earnings affect your weekly benefit payment. After that, you’ll get a partial benefit.

However, working as an independent contractor is different, because it’s a form of self-employment, and often the first step to starting a business.

And while some states allow the newly unemployed to start a business without risking unemployment Pennsylvania has taken the opposite stance. The state has decided unemployment compensation should not help fund new businesses.

As a result, working as an independent contractor is risky.

However, recent cases have shown there are some gray areas.

You can continue moonlighting.

First, the unemployment board has been clear on moonlighting. If you already had a second job after hours – say as a singer, photographer or Uber driver, you can continue the work if you meet the following conditions:

  1. you are able and available for full-time work,

  2. you don’t substantially increase your participation in the business, and

  3. the business is not the primary source of your livelihood.

Keep in mind, the net earnings from your sideline business will reduce your benefits the same as a part-time job.

Is it really self-employment?

In addition, when faced with specific cases, Pennsylvania appellate courts have been unclear on the definition of self-employment. When an employee is supplementing income, but is not starting a business, the lines are blurry. In these cases, Unemployment Referees have looked at case law to define self-employed and apply the definition on a case-by-case basis.

As a result, while there’s a risk in making money from gig work, there’s not a definitive answer as to whether or not it means an end to unemployment checks.

You can make a little extra cash. There is also a de minimus exception.

Written by

Brendan D. Hennessy, Esquire is an experienced attorney and provides an assortment of legal services, focusing in the area of Employment Law.