How Taking a Temporary Job Impacts Unemployment Benefits

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Working as a temporary worker is a great way to earn extra money when you're out of work and short on cash. Temp roles can serve as an opportunity to test out a new market or job role when the applicant may not have enough experience for a full-time position.

Temporary work can also be an excellent way for unemployed individuals to make a positive impression upon an employer and consequently be hired for a more permanent job in the future. However, many unemployed workers are financially strapped and fear the loss of their unemployment benefits if they take on a temporary or contract position.

How a Temporary Job Impacts Unemployment Benefits

What happens if you accept a temporary job while receiving unemployment benefits?

States have vastly different policies on how temporary employment is handled. So, you should contact your state unemployment office for a definitive answer on the impact on your benefits.

Reduction or Elimination of Unemployment Benefits

In general, your unemployment benefits will typically be reduced or eliminated during the period of your temporary work, depending on the level of pay for your temp job. Usually, you will still be entitled to the difference between your temp pay and the value of your unemployment benefits, if you earn less than the total amount of your unemployment benefits.

For example, if you earn $200 and are entitled to $400 in unemployment benefits, you will typically still receive $200 of unemployment compensation. However, if you earn $400 or more in that temp job, then your benefits would be suspended.

When the temporary job ends, you should be able to either continue your existing unemployment claim or open a new claim depending on your eligibility. If your benefit period has expired, you will need to reapply for unemployment.

Your benefits will generally be based on the preceding period of temporary work. State employment laws vary, so temporary employees may still qualify for unemployment benefits once the temp job has been completed. 

Eligibility for Unemployment Benefits After Temporary Work

Eligibility for unemployment benefits is based on several factors, such as the duration of the employment, the wages earned, and the reason for the unemployment and/or reduced hours.

As long as you are unemployed due to no fault of your own and you are actively seeking work, you may be eligible for unemployment benefits. Job seekers must typically accept any suitable employment, so turning down an opportunity can disqualify them from claiming benefits. 

Seasonal Workers

Similar to temp workers, seasonal workers are employed for short, specific times of the year due to weather-related or tourist-related industries. In some states, seasonal workers may not meet the criteria to be eligible for unemployment benefits.

Independent Contractors

Independent contractors typically cannot claim unemployment benefits like temp and full-time workers can. However, expanded unemployment benefits were available to self-employed workers, gig workers, and independent contractors during the pandemic.

Temporary Work and Total Unemployment Benefits

The amount of compensation you can receive through unemployment benefits is typically calculated based on your wages during a 12-15 month period leading up to your first day of unemployment. This time frame is considered the “base period.” It is advantageous to maintain employment regularly during this period, as it lowers the total amount, which lessens your eligible compensation rate.

Check the details of how to handle it with your state unemployment office.

Quitting a Temporary Job

If you quit a temporary job without a just cause, you will generally not be eligible to resume benefits. If you complete the term of your temporary work, you will often be able to resume unemployment benefits as long as your benefit period hasn't expired.

Accepting Suitable Employment

Some states have suitable work requirements, which require unemployed workers to accept a position that is considered suitable. However, what is considered suitable employment varies from state to state. So, check with your state unemployment office before turning down a job offer, even if it's for a temporary or contract job rather than a permanent position.

In general, suitable work is determined by compensation, working conditions, health and ability, required skills, and commuting distance. In some states, union workers registered with local hiring halls are considered exempt from these suitable work requirements. 

The information contained in this article is not legal advice and is 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 the law.