Can Employers File for Unemployment Benefit After Business Shut Down?

Many of us experienced a pretty crazy financial ride this year and if you’re someone who runs a business you might have recently shut down or are seriously considering it. There have been some devastating experiences due to the shutdowns we have and continue to face and some are wondering whether or not there is an unemployment benefit for employers available.

Suffice to say this is not an easy question to answer since many business practices, rules and laws are run on a state-by-state basis. We definitely do not have all of the answers to questions related to this topic, so we’ll throw a blanket disclaimer that the only real answers will have to be answered by a financial professional or your state government offices—neither of which are me.

However, here’s what I can share:

Eligibility for Employment Benefit for Employers

Most states have a set criteria for who is or isn’t eligible for employment benefits. Typically you need to meet some (or all) of the following criteria:

  • Physically able to work
  • Available to work a full-time job
  • Actively seeking employment
  • Unemployed through no fault of your own

On top of those requirements, those eligible for benefits are most often required to report into their local state employment office and fill out the required paperwork on a regular basis.  

Because of these particular qualifications, it’s possible that people who were previously self-employed might not meet these criteria. 

Paying Unemployment Insurance Tax

Further to those requirements, it’s also likely that in your state you have to pay unemployment insurance tax to be eligible to receive it when you need it. However, most states don’t require it when you’re self-employed which means your eligibility is unlikely.

But… Do You Get a Paycheck?

There is a chance that you can access unemployment benefits as someone who ran a business if you took a regular wage and held back unemployment benefits for yourself. As a salaried employee who’s paid the insurance, you might have a chance of accessing those benefits now that your business has been shut down. 

So, Can Employers File for Unemployment Benefit After Their Business Shuts Down?

The best way to answer this question for yourself is to reach out to your state government and inquire. It’s unlikely that you’re the first or last person that will have to do it, so don’t feel like you aren’t able to.

In most states, the answer will likely be no. But that doesn’t mean there are no resources for you to help you get yourself financially situated. I would encourage you to reach out and inquire, and if not, ask if they have any resources that you might be able to access or what direction you should look.

Have you accessed previous unemployment benefit for employers? Share your experience in the comments below!

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