(3rd in a 3 part series)
A nanny will often lose her full time employment through no fault of their own. The nanny applies for and qualifies for unemployment benefits while she searches for a new full time opportunity.
Household staffing agencies report that qualified nannies will turn down temporary work opportunities because they fear permanently losing their unemployment benefits.
Temporary work is often for a day here or there - often providing emergency back up care when a child is too ill for group care settings or event child care (weddings for example). Temporary work may also be longer term - an several week assignment while the primary caregiver recovers from surgery for example.
Did you know that all states have a formula to determine Partial Unemployment Benefits, specifically designed to be an incentive for benefits recipients to accept temporary employment? In the eyes of the unemployment compensation fund, temporary work creates the opportunity for full time employment and helps workers retain skills or learn new skills - all positive outcomes.
How does a temporary nanny job affect unemployment benefits? Let's look at two scenarios below.
Temporary work earnings less than Weekly Benefit Amount
Susan lives in Maryland and receives a $500 weekly unemployment benefit (WBA). She is offered a temporary job by a nanny agency staffing childcare for an event. She would work 8 hours and earn $125. What does this do to her weekly benefit? Is it worth her while to take the job?
The formula is usually WBA - (Temporary Earnings - Disregard Amount) = Partial Benefit Amount. In Susan's case, this would be $500 - ($125 - $100*) = $475. Susan's unemployment benefit for that week only would be $475, and when she adds her $125 earnings her weekly income for that week is $600. Clearly taking this temporary assignment is a win-win situation.
* The disregard amount and specific formula varies by state - this is an example only.
Temporary work earnings more than Weekly Benefit Amount
Luz has been receiving unemployment benefits of $500 per week for 16 weeks. She is offered a 6 week position, covering a full time caregiver who is having surgery, that pays $700 per week. Liz worries about what happens 6 weeks later when the job ends.
Unemployment claims generally cover a one year period. A benefit recipient who accepts other work that then ends through no fault of their own (the situation here with Luz) whose claim has not expired would simply reopen the claim and again begin receiving benefits.
The procedures and calculations are state specific. Most states have automated reporting systems - online or via touch tone phone - to report earnings (if any) during each WBA. Exact circumstances DO matter - it is important to educate yourself about the specific regulations and procedures in YOUR state. Google is your friend here - look it up, double and triple check if advice is from ANY source other than a government website.
A nanny who manages their temporary work wisely can improve their weekly earnings and still remain available for interviewing and other job seeking activities.