How to Manage Unemployment and Lost Business Income During the Pandemic


As the Coronavirus pandemic continues, the number of people becoming unemployed or losing business income is mounting. According to the Labor Department, nearly 17 million workers have filed for unemployment benefits in the past three weeks. Countless numbers of businesses—restaurants, salons, hotels, shops, and factories—have closed temporarily or, in some cases, permanently.

If you’ve been laid off or expect to be, it’s critical to take advantage of every possible benefit and pivot to a new opportunity as quickly as possible.

If you’ve been laid off or expect to be, it’s critical to take advantage of every possible benefit and pivot to a new opportunity as quickly as possible.

I interviewed Colleen McCreary, Chief People Officer at Credit Karma, for tips on how to navigate unemployment due to the coronavirus disaster. She joined Credit Karma in 2018 and now oversees more than 1,300 employees across offices in the U.S., Canada, and the U.K.

Colleen has more than 20 years of experience in human resources, recruiting, and operations. She understands managing people in technology companies so well that she became a technical advisor for the popular HBO series, Silicon Valley. The show’s astute HR administrator was taken straight from Colleen’s real-world experiences!

On the Money Girl podcast, Colleen and I discuss what to do if you become unemployed. We cover a variety of topics, including:

  • The difference between layoffs and furloughs
  • Key questions to ask your human resources administrator
  • Whether you should negotiate during a termination
  • How to maximize benefits from your old job
  • Tips for finding a new job if you get laid off
  • Common mistakes that laid-off employees make

Listen to the interview using the embedded audio player or on Apple PodcastsSoundCloudStitcher, and Spotify.

How to manage unemployment and lost business income due to the coronavirus

Here are some tips from Laura and Colleen for navigating the financial hardship of unemployment and lost business income the best ways possible.

1. Understand your unemployment circumstances

There’s a big difference between being laid off and being furloughed, so be sure you understand the circumstances for your unemployment. Ask to get the terms of your separation from your company in writing. And don’t sign anything before you’ve had time to understand it fully.

A furlough generally implies that the company plans or hopes to bring you back after a certain period. Think of it as mandatory leave without pay.

A layoff, or reduction in workforce, generally implies full termination from a company. Your role, a percentage of the company workforce, or certain divisions may get eliminated.

Another situation is a complete office closure, which happens when an entire location or company shuts down. It’s similar to a layoff in that it’s usually a full separation, although sometimes you could be asked to relocate to another division or office location.

2. Know your benefit options

During a furlough, your company may continue to provide regular benefits and vest equity or matching purposes (though this varies by company). Some companies allow you to bridge some of the initial furlough by using any available paid vacation days.

With a layoff, your benefits may end right away, or some may continue through the end of the month.

3. File for unemployment

Unemployment insurance provides weekly payments to eligible workers who become unemployed or have a loss of income through no fault of their own. The program is administered jointly by the US Department of Labor and individual states to help workers get through a temporary financial hardship.

If you’ve lost a substantial amount of your job or self-employment income due to the coronavirus, you’re likely eligible for unemployment benefits.

In March 2020, federal laws were expanded to allow many people to collect unemployment insurance who weren’t previously eligible. You may now be eligible if:

  • Your employer permanently or temporarily laid you off due to coronavirus
  • Your employer reduced your work hours due to coronavirus
  • You are self-employed and have lost income due to coronavirus
  • You’re quarantined and can’t work due to coronavirus
  • You’re unable to work due to a risk of exposure to coronavirus
  • You can’t work because you’re caring for a family member due to coronavirus

The bottom line is that if you’ve lost a substantial amount of your job or self-employment income due to the coronavirus, you’re likely eligible for unemployment benefits. As I mentioned, it’s available for those who have lost their jobs, been furloughed, had work hours reduced, or quit due to fear of getting exposed to the coronavirus.

Unemployment benefits are now also available for the self-employed who have a sole proprietorship, a limited liability company, or an S corporation. It includes anyone who works as a freelancer, an independent contractor, or a gig worker and has 1099 income.

However, if you have a C corporation or another type of business that employs workers (including yourself), the new Payroll Protection Program was designed to help you keep paying W2 employees.

The weekly unemployment payment amount varies significantly by state. Historically, the program has tried to replace about half of a typical worker’s income. However, the new federal law increases the weekly benefit amount that states pay by $600 until July 31, 2020. States often pay about half of the average worker’s income.

The length of time that states pay unemployment benefits varies significantly but could be around 26 weeks. The new federal law pays an additional 13 weeks of benefits if you’re still unemployed after your state benefit runs out. Neither state nor federal unemployment payments that you receive must be repaid.

Use the Unemployment Benefits Finder at Careeronestop.org to learn how to file for unemployment insurance in your state. Many states are updating their systems to respond to significant federal law changes and the massive numbers of applicants. So, if you aren’t successful at first, keep trying.

I received a question from Lydia B., who says:

I make income though W2 part-time work, but more than half of my income is from 1099 contract work. I applied for unemployment for my part-time job and have been trying to figure out how to apply for my contract work. My state’s unemployment office is swamped, and I can’t get through.

Thanks for your question, Lydia. As I mentioned, if your W2 or 1099 income is down due to coronavirus-related hardships, you may be eligible to collect unemployment for both of them. Just keep trying to get through to your state’s website.

Many states have relaxed or eliminated the requirement to search for a new job while you receive unemployment benefits.

Some states may have a waiting period, such as a week before benefits begin, but some have waived them. That should allow payments to start as soon as claims are processed. You will get benefits going back to the first week that you were unemployed, not as of the date you applied for them.

Also, many states have relaxed or eliminated the requirement to search for a new job while you receive unemployment benefits. That helps anyone feeling a financial pinch to stay home and practice social distancing guidelines.

For information about more relief programs, visit the Department of Labor website. Take the time to understand your options and take action to secure all the benefits you’re eligible for. 

4. Don’t be afraid to use your network

With so many people stuck in their homes right now, there’s an opportunity to reconnect or start a conversation with someone who can help you find a new opportunity. You may find that during the coronavirus crisis, people in your network may be more willing or have more time to help. So, get a leg up by having the confidence to reach out to your network.

5. Prepare to impress recruiters

It’s a good idea to ask your previous manager, coworkers, or customers for references so you can provide them when you apply for new jobs.

It’s a good idea to ask your previous manager, coworkers, or customers for references so you can provide them when you apply for new jobs. LinkedIn gives you an easy way to ask for references that you can elect to have on your profile. Make sure your profile is updated and clearly highlights your skills and experiences.

Also, consider asking a friend or family member to practice mock interviews with you. You might be rusty, so rehearsing talking about your past roles and responsibilities will help you put your best foot forward.

When you interview for a new job, never speak poorly about a past employer. And be sure to research the company so you can talk intelligently about their website, products, market, and customers.



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