A record number of Americans are on unemployment benefits at a time when many large companies are looking to hire hundreds of thousands of temporary workers before the holidays.
If you're one of the more than 20 million Americans on unemployment benefits and you're struggling to find sustainable jobs, you might consider getting a seasonal gig at a place like Amazon, Target, or UPS.
But is it a good idea to get a seasonal job while you are receiving unemployment benefits?
"There's no real incentive to get a seasonal job," said Michele Evermore, senior policy analyst and unemployment insurance expert for the National Employment Law Project. "There's a little more padding, so I think it's pretty smart as long as it's appropriate."
We will describe in detail what a suitable replacement job is and explain why you generally don't have to worry that taking on a seasonal job could cost you your advantages.
What happens if you get a seasonal or temporary job while you are unemployed?
In an interview with The Penny Hoarder, Evermore explained how taking on a seasonal job can affect the length of your unemployment benefit and the amount you receive each week.
Let's sum it up.
Duration of benefits
Despite the pandemic, the majority of states offer unemployment insurance benefits for 26 weeks. According to an analysis of the Center for Budgetary and Policy Priorities' unemployment programs, "seven states are giving fewer weeks and one more."
On the lower end of the spectrum, Florida and North Carolina offer benefits for up to 12 weeks. On the high end, Montana offers up to 28 weeks.
These typical services of 12 to 28 weeks do not have to be consecutive. You can pause and resume as needed. The main condition here is that these weeks must fall within your “performance year”.
Your benefit year is a 365-day period that begins when you're first approved for benefits, Evermore explains, and doesn't necessarily sync with the calendar year. For example, if you were approved for benefits in June 2020, your benefit year would last until June 2021. In general, you can take any number of these 12 to 28 weeks throughout the year.
However, if you use them all up quickly – including any available enhancements – you won't be able to receive any more benefits until your year of benefit is up and a new one will begin. This is where strategic employment, even a temporary appearance, can help ensure that your performance lasts a little longer.
"It doesn't extend your year of achievement, but it does extend your eligibility later that year," said Evermore.
"So I'm entitled to 26 weeks of benefits this year. If I can fill part of this year with work, I'll be less likely to run out of benefits before I can find a good permanent replacement job," she added .
This scenario is the case with regular government unemployment insurance programs. Emergency legislation in response to the pandemic created federal unemployment programs – including Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) – that are only available for a limited period of time.
Both federal programs expire on December 26, unless they are extended by Congress. If you have one of them, you will no longer be able to receive benefits after December 26th. Likewise, if you take on a seasonal job beyond December 26, you will no longer be able to receive these federal benefits.
The latest data from the Department of Labor shows that more than 13 million Americans receive benefits through PUA and PEUC. If you are one of them, it may be in your best interest to rely on these benefits now and look for a long-term job instead of a seasonal one.
Amount of benefits
In many cases, your weekly unemployment benefit will be interrupted while you work.
Let's say you receive a weekly payment of $ 300. You choose to do a three-month temporary job at Best Buy that pays $ 600 per week. First of all, inform your public authority that you have found temporary employment. Then your performance will pause during your employment. Once your temporary gig has expired, you can resume your weekly payments of $ 300.
However, if you take on a new job that doesn't pay as much as your weekly benefit amount, you may be eligible for partial benefits. Each state has its own set of rules, but typically your unemployment benefits are reduced dollar by dollar while you work, Evermore says.
So, if you're getting $ 300 a week in benefits and getting a part-time job that pays only $ 150 a week, in most cases your state will make the difference and save $ 150. In this scenario, each week of partial benefits will continue to count towards your eligible weeks – the 12 to 28 weeks above.
If you are concerned that your benefits will be cut after you finish your seasonal job, don't. Many people believe that once unemployment benefits resume, payments will be based on income from their seasonal job and will ultimately lower their weekly payments.
Evermore says this is a common misconception. As long as you are still in your performance year, your weekly payments will likely return to normal.
What else should you watch out for?
While Evermore sees no major barriers to accepting a seasonal job, her recommendations come through the lens of finding a new job that fits a "suitable match".
To understand what she means, let's get philosophical for a moment and consider the purpose of unemployment benefit. The programs will help you get back on your feet after you've been discharged through no fault of your own.
If you used to be a dental hygienist who made $ 80,000 a year, does this seasonal $ 15 an hour job really help you get back on your feet?
"One of the reasons unemployment insurance is an economic stabilizer," Evermore said, "is because it keeps people from being desperate enough to take terrible jobs." It prevents a recession from allowing employers to take full advantage of the unemployed, desperate workforce. "
The term “suitable employment” could have a legal meaning at your state employment office. Suitable employment refers to jobs that are related to your qualifications, work experience and previous pay.
Longer and more generous unemployment programs help people find better replacement jobs during a recession, according to a recently published white paper report by the National Bureau of Economic Research.
"We find that the generosity of the user interface allows employees to search longer and eventually find jobs that better match their skills," the report said.
In some cases, it would be better to spend your time and effort looking for a long-term job comparable to or better than the one you lost.
"You don't necessarily want people to take their first low-hour, fixed-term, low-paying job," Evermore said.
Adam Hardy works for The Penny Hoarder. He deals with the gig economy, entrepreneurship and unique ways to make money. Read his latest articles here or say hello on Twitter @hardyjournalism.
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