Many people think that holding a part-time job after they lose a full-time job will compromise their ability to collect unemployment benefits, but this isn't necessarily the case. You might be eligible to receive unemployment benefits even if you're currently working part-time. You might also be eligible if you've lost your part-time job.
Eligibility for partial unemployment depends on the state you work in and on your qualifying for unemployment compensation based on your employment history.
Eligibility When You Work Part-Time
Unemployment benefits are designed to help workers temporarily bridge an income gap caused by a loss of employment that came about due to no fault of their own. Some people find themselves with reduced hours or are only able to find part-time employment after being laid off when what they truly want—and need in order to pay their bills and remain financially solvent—is full-time work.
Partial unemployment benefits are available to encourage workers to continue to work part-time while they seek full-time work. Depending on location, they also may be available for workers who have lost part-time positions.
You must be available for, and actively seeking, employment to qualify for partial benefits. Check with your state's unemployment office for the exact information that's pertinent to your situation, because requirements and benefits can vary by state.
Who Qualifies for Partial Unemployment
You would normally not qualify for partial unemployment benefits if you've scaled back your work hours for family or personal reasons. State guidelines vary though, so it's important to check with your state department of labor office for qualification criteria in your location.
- Most states provide partial benefits to individuals whose work hours have been reduced through no fault or choice of their own—for example, when a company is sold, liquidated, or restructured.
- Many states also cover employees who have lost their full-time jobs and have partially replaced the lost income with one or more part-time jobs. Some states even cover individuals who were working two or more part-time jobs and lost one of those jobs.
- Workers who are not technically laid off or terminated but placed on “zero-hour schedules” are eligible for unemployment compensation in most cases, according to Andrew Stettner, a senior fellow at The Century Foundation.
Eligible workers must meet the requirements within their state for minimum earnings during the unemployment base period. They must also satisfy the minimum time-of-employment state requirements. Check with your state unemployment office for guidelines.
Each state has its own eligibility formula. For example, in Georgia, workers who have lost a full-time job, but are working part-time and earn less than their weekly benefit amount are eligible. Workers who have lost a part-time job or whose hours are reduced also may qualify to collect unemployment.
How Partial Benefits Are Calculated
Most states calculate the total amount of your benefits by first figuring out what you would have been entitled to if you were still fully unemployed. The amount you're earning through part-time employment will usually be subtracted from this figure.
For example, in New York, you can work up to seven days a week without losing unemployment benefits for that week if you work 30 hours or fewer and earn $504 or less in gross pay, excluding earnings from self-employment. Benefits will be reduced in increments based on your total hours of work for the week rather than on the number of days you work.
In New Jersey, you must earn a minimum of $220 a week to be eligible for unemployment insurance benefits. Partial benefits are calculated based on the hours you work and how much you earn.
Document Your Earnings
It's important to report your weekly earnings accurately when you're working part-time and receiving unemployment benefits. It’s illegal and considered fraudulent to collect benefits to which you aren't entitled.
You'll also have to document your search for either full-time or, in some cases, part-time employment in order to continue to receive partial unemployment benefits.
Extending Your Claim
Working part-time can extend the number of weeks you're eligible to draw benefits in some states. It can also enable you to qualify for a new claim when your benefit year ends because of your accumulated part-time earnings.
Why You Might Take a Part-Time Job
Taking a part-time job after losing your full-time position might seem like a step backward, but it may come with many benefits that could boost your career in the long run—not to mention some cash that might come in handy. You’ll probably earn more money by combining your partial unemployment benefits with income from a part-time job.
Progress Toward a Full-Time Job
Working part-time while you're collecting unemployment can be beneficial not only to your bank account, but also to your long-term job search. You'll make contacts, gain experience, and develop new skills in every job you hold, even if it’s not in your chosen field. You can use the opportunity of part-time work to explore other fields of interest or to get training and experience that would be helpful to your career goals.
The department of labor website for your state can direct you to important information that can help with your job search, including job postings, job fairs, effective job-interview preparation and techniques, and supplemental job training, education, and seminars.
Boosting Your Self-Esteem
Accepting part-time work while you seek full-time employment can also provide a psychological boost. It lends a positive focus even in the midst of a new job search.
No Gaps on Your Resume
Working part-time also allows you to demonstrate a continuous work history on your resume, avoiding the possible red flag of significant gaps in employment for potential new employers.
NOTE: The information contained in this article is not legal advice, and it's not a substitute for such advice. State and federal laws change frequently, and the information in this article may not reflect your own state’s laws or the most recent changes to them.