Independent Contractor Compliance Blog

New Program for Self-employed Entrepreneurs

The U.S. Department of Labor (DOL), working with some state employment agencies, is offering training that provides “dislocated workers the opportunity for early re-employment” through self-employment. This means that if someone has lost his/her job and wants to create a small business, there is a federal program than can help.

The Self-Employment Assistance Program will pay a “self-employed allowance”, instead of regular unemployment insurance benefits, to help unemployed workers establish their own independent businesses and become self-employed (i.e. independent contractor/sole proprietor). Qualified participants receive weekly payments while the business gets off the ground. Generally, in order to receive these benefits, an individual must first be eligible to receive regular unemployment insurance.

This program was designed for individuals who have been permanently laid-off from their jobs and are identified (through a state’s profiling system) as likely to exhaust regular unemployment benefits. Individuals may be eligible to draw benefits under this program even if they are engaged full-time in what the DOL refers to as “self-employment activities” such as entrepreneurial training, business counseling, technical assistance, and seeking out clients. The self-employment payments are the same as the weekly amount of regular unemployment insurance benefits; however, the participants are freed from looking for employee jobs so they may pursue a new career as a self-employed entrepreneur.

The program is voluntary for states to participate in, and so far only a few states have opted to participate. These states are Delaware, Maine, New Jersey, New York, Oregon, and Washington. Each participating state will likely have slightly different requirements and processes for this program, so if you are interested you should look into the requirements for your state. To find out more about each of these states’ programs, go to: www.servicelocator.org/OWSLinks.asp.

The Self-Employed Assistance Program can be a great opportunity for an individual who lives in one of these states to make a significant career change.

Disclaimer: Given the general nature and context of this article, the material presented should not be relied upon or construed as legal advice. For specific information on recent developments, the effects of particular factual situations or of a particular law in regards to your business, or before making decisions based upon this presentation, you should obtain the opinion of a qualified expert.

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