Legal Question in Employment Law in California

In February this year I lost my job in Santa Rosa, CA because of a downsizing. I am now collecting unemployment benefits but am actively seeking work, however, recently a friend asked me if I wished to help out on his new ecommerce venture (I have a marketing MBA) in my spare time. I was offered some incentive options at a set rate per hour for "work" performed but no monetary compensation and no money will be owed to me. I am reluctant to say yes, however, because on my UI cards that I need to fill in order to be eleigible to collect my uemployment Question 6 specifically asks "Did you work or earn any money, WHETHER YOU WERE PAID OR NOT?"... If I do work for my friend for no direct financial contribution other than the options can I answer No to the above question or am I putting myself at risk for being untruthful and perhaps have my claim questioned?

I am sure many people are looking at ways to create work for themselves or launch a new business in their spare time but are not directly financially compensated, however, this seems like a grey area to me and I am looking for some guidance and clarification. Thank you...DC


Asked on 4/18/12, 4:46 am

1 Answer from Attorneys
Michael Kirschbaum Law Offices of Michael R. Kirschbaum

It is not a grey area, you need to report that you did perform work, but you can state you have not earned any money. One of the criteria to be eligible for unemployment is that you are actively seeking employment and are available for work if a job were offered. If the EDD finds out you omitted the fact that you were providing services for someone, with or without pay, they will almost certainly require you to repay the benefits for withholding a material fact that may have impacted eligibility. It is always better to err on the side of full disclosure with the EDD. They have been cracking down lately and actively seeking repayment of benefits for even the most minor of omissions.

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Answered on 4/18/12, 10:57 am


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