It is important to understand that eligibility must be reviewed each time a week of unemployment is claimed during one of the denial periods (i.e., multiple times during the UC benefit year – Thanksgiving holiday, Christmas holiday, between terms breaks, spring break, etc.). Fact-finding will be conducted with the claimant and the employer as to whether the claimant performed services prior to the denial period and has a reasonable assurance of providing such services, under economically equivalent terms and conditions, after the denial period.
DEFINITIONS AND EXAMPLES
|Type of Employee
||School employees serving in an instructional, research, or principle administrative capacity|
||School employees serving as bus drivers, janitors, cafeteria workers, maintenance workers, secretaries, school nurses, etc. (When such service(s) are performed by employees of a contracted outside company, Section 402.1 does not apply to company employees.)|
|ESA (employee of a governmental agency/entity established to provide services to an educational institution)
||Employees of intermediate units, school crossing guards and special school police|
An academic year at the secondary school level: Kindergarten, elementary, middle or senior high school is generally a nine-month period when classes are held, usually beginning in August and ending in June. Summer recess - an extended suspension of business that generally occurs beginning June through August. NOTE: Summer school for public school districts in Pennsylvania, grades 1 through 12, is not considered an academic term.
An academic year at the higher education level: A college or university generally has a cycle of five divisions of time during which classes are held (i.e., "terms"). In general, the five terms that may occur in a calendar year include: Fall, (12 weeks) September – December; Winter, (12 weeks) January – April; Spring, (12 weeks) May – August; Intersession, (6 weeks) May – June; Summer, (6 weeks) July – August. The higher education academic year could also be divided into semesters: two cycles of 18-week periods of instruction, quarters or trimesters; four cycles of 12-week instruction or every three months. Each cycle would have scheduled periods for the various holiday vacation periods within the cycles.
Vacation: A scheduled period during the school year in which activity is suspended.
Holiday Recess: Scheduled time off during a school year for commemorating holiday events. The secondary school year holidays generally occur on: Labor Day, Columbus Day, Veterans Day, Thanksgiving, Christmas vacation/winter break, Martin Luther King, Jr.'s Birthday, Presidents Day, Memorial Day and spring break.
Following are examples of eligibility issues that are not related to the claimant's separation from employment.
ABLE AND AVAILABLE
Compensation shall be payable to any employee who is, or becomes, unemployed and is able to work and available for suitable work. The claimant must prove a realistic attachment to the local labor market as a whole, as indicated by the claimant's readiness, willingness, and ability to accept some substantial and suitable work. The claimant must certify that he/she is able to accept and is available for suitable work during each week for which he/she files a claim for benefits.
You may be ineligible for benefits if you are self-employed, setting up a business, or have ownership interest in a business.
SELF-EMPLOYMENT DURING THE BASE YEAR
Services performed in self-employment do not qualify as Base Year employment and will not be used to establish financial eligibility for benefits. Independent contractors are self-employed. The following two factors must exist for a claimant to be considered self-employed. 1) The individual has been and will continue to be free from control or direction over the performance of his/her services, both under his/her contract of hire and in fact. 2) As to such services, the individual is customarily engaged in an independently established trade, occupation, profession or business. If the claimant alleges an employer/employee relationship, but the employer states that the claimant is self-employed, the employer must prove that the claimant is free from control over the performance of the service and customarily engaged in an independently established trade, occupation, profession or business.
SELF-EMPLOYMENT WHILE CLAIMING BENEFITS
Section 402(h) provides that a claimant is ineligible for any week in which he/she is engaged in self-employment. When a claimant is starting a new business, the claimant becomes self-employed with the first positive step toward starting the business. For example, the claimant would become self-employed when he/she began advertising for business, rented an office, purchased equipment/property, etc.
There is an exception in Section 402(h) for the operation of a sideline business. The courts have provided a four-pronged test for eligibility for an individual engaged in a sideline business. An employee who has a proprietary interest in a sideline business may still receive benefits if it is proven that all four of the following conditions are met:
Concurrency - the self-employment activities must have been conducted while engaged in employment.
Primary source of income - the earnings from employment must exceed the net profit from the self-employment activities.
There cannot be a substantial increase in involvement in self-employment.
- The claimant must be able and available for FULL TIME suitable work.
The burden of proof in a situation involving a sideline business rests with the claimant. The claimant must provide information and documents showing that the self-employment venture is a sideline business and that the claimant is separated from employment that constituted the individual's major source of income.
The UC Law was never intended to provide benefits to those individuals who become "unemployed" by reason of the failure of their own business ventures. An individual, who, through ownership of stock and his/her position in the corporation, exercises a "substantial degree of control" over its operation, must be considered a self-employed businessperson. The claimant must provide information showing that he/she is not a self-employed businessperson to be eligible. The only exception with respect to ineligibility of corporate officers is provided in Section 402.4 of the Law. If the corporation has been forced into involuntary bankruptcy under the provisions of Chapter 7, Title 11, of the United States Code, the officers of the corporation would not be ineligible for benefits.
REFUSAL OF SUITABLE WORK
Section 402(a) provides, in part, that an employee shall be ineligible for compensation for any week in which his/her unemployment is due to failure, without good cause, either to apply for suitable work at such time and in such manner as the department may prescribe, or to accept suitable work when offered to him/her by the employment office or by any employer. The employer must notify the department within seven days of the offer of work.
Section 402(a.1) provides a claimant is ineligible for compensation for any week in which the unemployment is due to failure to accept an offer of suitable full-time work in order to pursue seasonal or part-time employment.
The responsibility rests with the department to determine whether the work that was offered was suitable (see "Due to Unsuitable Work"). If the work is determined to be suitable, the claimant must show that he/she had good cause to refuse the referral or to refuse the offer or suitable work to be eligible.
Section 402.6 provides, in part, that an employee shall not be eligible for any weeks of unemployment during which the employee is incarcerated after a conviction. The party who carries the burden of proof is dependent on who alleges that the claimant is both convicted and incarcerated.
If an employer alleges that the claimant is convicted and incarcerated, the employer must show that the claimant meets both requirements for ineligibility under Section 402.6, in that he/she is both convicted and incarcerated.
- Where the department investigates potential ineligibility under Section 402.6 without information from an employer or claimant, the department must show that the claimant is both convicted and incarcerated. If the claimant provides information, which indicates there is a potential issue under Section 402.6, the claimant must show that he/she is not both convicted and incarcerated.
You may be ineligible for benefits if you participate in a work stoppage that is determined by the department to be a strike.
Severance pay received by a claimant that exceeds 40 percent of Pennsylvania's average annual wage* is deducted from the claimant's UC if the claimant's application for benefits (AB) date is on or after Jan. 1, 2012, and the severance pay agreement between the employer and the claimant is entered into on or after Jan. 1, 2012. The deductible portion of a claimant's severance pay is allocated to the weeks immediately following the claimant's separation based on the claimant's full-time weekly wage. Severance pay means one or more payments made by an employer to an employee on account of separation from the service of the employer.
Example: A claimant receives $32,000 in severance pay. Forty percent of Pennsylvania’s average annual wage ($46,181 for 2013) is $18,472. Therefore, $18,472 is subtracted from $32,000 to get $13,528, which is the total severance pay amount that is deductible. The claimant was earning $1,200 a week at the time of his separation. Â Accordingly, the claimant’s weekly wage of $1,200 is allocated to the first 11 weeks the claimant is unemployed. Because $1,200 exceeds the maximum weekly UC benefit rate, the claimant would not receive any benefits for this 11-week period. The 12th week would be calculated by taking the remaining severance pay amount of $328 to determine eligibility.
SOCIAL SECURITY OR PENSIONS
Pensions and retirement payments are deducted from UC if a base-year employer maintained or contributed to the pension plan and base-year employment affected the claimant's eligibility for, or increased the amount of, the pension. Fifty percent of the pro-rated, weekly pension amount is deducted if the claimant contributed in any amount to the pension plan. If the pension is entirely employer funded, 100 percent of the pro-rated, weekly pension amount is deducted from UC.
Social Security and Railroad Retirement pensions are not deducted from UC benefit payments.
A lump-sum pension payment is not deducted from UC, unless the claimant had the option of taking a monthly pension. In addition, a lump-sum pension is not deductible if the claimant "rolls over" the lump-sum into an eligible retirement plan such as an Individual Retirement Account (IRA) within 60 days of receipt.
PREDETERMINATION OF CLAIMS
Please note that eligibility for unemployment compensation is not predetermined. Eligibility determinations only are made after an application for benefits has been filed and are based on the individual circumstances of each case. If you have a question regarding your claim or the claim of a former employee, please contact a UC service center at 1-888-313-7284.
UNDERSTANDING THE DETERMINATION
If you have any questions or do not understand any part of a determination, please feel free to contact the UC service center to request an explanation of your determination. For example, if you do not understand the provision of the Law, or if there are findings of fact that you question, you may contact the UC service center for an explanation.
You may appeal if the determination denies benefits and you think you should be eligible for benefits, or the determination grants benefits and you think you should be eligible for more benefits.