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Independent contractor? Think twice about unemployment benefits

Did you know that you could be eligible for unemployment benefits, no matter your reason for losing your Michigan job? All too many residents are denied unemployment benefits because they are fired or forced to resign. If you have lost your job for any reason other than misconduct, you may be eligible for these benefits. This may even be true for some Michigan residents who have traditionally been classified as independent contractors, according to recent case law.

Independent contractors, or those who are self-employed, are not considered employees for the purposes of unemployment insurance. In some instances, though, our clients have been unfairly miscategorized as independent contractors when they really deserve access to unemployment benefits. This may be considered a form of workplace discrimination, depending on the context. The key difference between an employee and a contractor: the amount of control the employer exerts over the person’s everyday job duties.

If you wake up and drive to an office or other company facility, you are almost certainly an employee. This is because the employer can be said to exert a significant amount of “direction and control” over your work. You probably have specific tasks, due dates and special processes for completing your job.

Independent contractors, on the other hand, are seen as service providers for an entity that is enlisting their services. Imagine the case of a graphic designer who is hired by a company to create a new logo — that person’s job processes are not controlled by the company, nor does the person perform work on company equipment. The employer does not provide control and direction, but rather serves more as a consumer purchasing a product.

Independent contractors are not eligible for unemployment insurance, but do not give up if you have been denied. Your employer may have unreasonably characterized you as an independent contractor so they could enjoy additional tax breaks. Do not let an employer deny you your tax rights and prevent you from collecting the unemployment benefits you deserve.