Melissa Potter, Program Officer, NYFA Source

This article originally appeared in the Fall 2004 NYFA Quarterly.

Unemployment insurance provides an income to workers who have been laid off or terminated without cause by an employer. Employers pay a separate tax, which the New York State Department of Labor uses to pay these benefits. Unemployment insurance is a universal entitlement to those who qualify, even for some artists who work seasonally or part-time. However, many artists who are self-employed or work freelance may not qualify for unemployment benefits.

One of the potential and perhaps most common exclusions for an artist trying to qualify for unemployment insurance, even if she or he has worked part- or full-time for an employer, may be in filing a Schedule C tax form. An artist operating a business or profession as a sole proprietor, partner in a partnership, independent contractor, or consultant may need to report resulting income on a Schedule C tax form. Many artists file these forms for sales of their artwork, for commissions, and for workshops they teach, just to name a few examples. The tax deductions artists take as businesses or sole proprietors are one of the criteria excluding them from unemployment benefits, as is the status “not totally unemployed” that results from this reported income. Unfortunately, it is possible that an artist bringing in a modest amount of additional, untaxed income on a Schedule C may be as excluded as someone making her or his entire living as a freelance sole proprietor.

Another serious problem artists may have with unemployment benefits is the possibility of “recoverable overpayments.” The Department of Labor may determine at any time during a recipient’s collection of benefits that she or he was not entitled to them because of other earnings. This is where things get complicated for artists, not just in terms of a Schedule C. Certain types of promotion of artwork, such as a website encouraging sales, may be perceived as possible sources of income and could lead to potential exclusions for unemployment benefits. Before artists panic, however, it should be noted that if the agency is responsible for overpayment due to a fault in its system or incorrect computing of benefits, the agency deems these “non-recoverable,” and the claimant is not liable for return of the payment. In any event, it is best to give all the information the unemployment board asks for, and give it honestly. Return of benefits may take place if the Department of Labor believes the individual lied or withheld information in her or his unemployment insurance application. It is extremely important to do your homework before you apply so that you do not end up in this situation.

Unemployment insurance is a very complex issue, and it is highly recommended that artists hoping to collect speak with professionals. Below is a short list of some useful resources. NYFA currently offers fall and spring workshops in the metro area on business and legal topics for artists. Check NYFA’s website (www.nyfa.org) for information on upcoming topics.

United States Department of Labor
http://www.dol.gov/dol/topic/index.htm
The website contains descriptions of unemployment benefits, as well as links to state pages.

NELA: National Employment Lawyers Association
http://www.nela.org
212.302.0718
NELA offers a referral service online or by phone.

Unemployment Action Center
www.law.nyu.edu/studentorganizations/unemploymentactioncenter/index.htm
The Unemployment Action Center offers legal representation services.

Workers Defense League
212.627.1931
The Workers Defense League offers counseling on how to apply for benefits and free representation to appeal denials of benefits, in addition to providing information and referrals on other workplace issues.

Thanks to Jon Bloom from the Workers Defense League for information and advice regarding unemployment insurance issues.

A regular column in NYFA Quarterly, Ask Artemisia is made possible by the NYFA Source funding consortium. Major support for NYFA Source has been provided by The Ford Foundation. Additional support has been provided by Basil H. Alkazzi; Artist Legacy; Lily Auchincloss Foundation; The Cowles Charitable Trust; The Robert and Helen Gould Foundation; Independence Community Foundation; The Liman Foundation; Virginia Manheimer; The Joan Mitchell Foundation, Inc.; a gift in honor of Eva J. Pape; Pew Fellowships in the Arts; The Pollock-Krasner Foundation, Inc.; The Judith Rothschild Foundation; The Marie Walsh Sharpe Art Foundation; and The Andy Warhol Foundation for the Visual Arts, Inc.