Lawyer's Unemployment Benefits Yanked Over $1 A Day From Blog

From Forbes
David K. Randall, 10.07.09,
1:50 PM ET

Does
writing a blog constitute work? That appears to be the position of the
New York State Department of Labor, which recently declared a laid-off
attorney ineligible for unemployment benefits because she was bringing
in $1.30 a day from blog ads.

Earlier this year Karin--a 2008 graduate from the University of
Virginia School of Law who asked that her last name not be
published--was laid off by a New York City law firm six months into her
job.

Karin applied for state unemployment benefits and began receiving
$405 a week. Unable to afford her rent in New York, she moved to St.
Louis, Mo., and began searching for paralegal jobs while preparing to
take the Missouri bar exam (it is common, and legal, for the unemployed
to receive jobless benefits from the state where they last worked, even
after moving elsewhere.)

In April, Karin started a blog, called STL Meal Deals, where she
wrote about local restaurant promotions. Since she received no payments
from the businesses she mentioned, Karin decided to try generating some
income by signing up for Google
AdSense, a service run by the Web search giant that pays bloggers to
host ads on their sites. Google sends bloggers checks when their
earnings hit $100--a level that took Karin three months to achieve.

When the check came in, Karin realized she had a legal obligation to
disclose the income to New York State, even though doing so might
reduce the weekly unemployment benefits she received. According to
state regulations, anyone receiving unemployment benefits who works one
day and earns less than $405 will have his check for the week reduced
by 25%. Someone who earns more than $405 in a single week becomes
ineligible for any payments for that week.

It was after Karin notified the Department of Labor of her AdSense
income that the confusion started. New York cut her weekly benefits to
$300 and sent her a form to fill out and send to her employer. Unsure
whether Google was considered her employer, Karin called the DOL to get
an answer. She says a state official told her she shouldn't have
claimed the AdSense payment as income because it was "residual,"
meaning a payment made for services previously rendered. New York does
not regard residual income as employment pay that could make someone
ineligible for unemployment benefits.

The call prompted Karin to file another claim with the state and to
attach a letter stating she was running a blog and that the Google
AdSense revenue it generated was her only source of income. A few days
later, she received a letter from the DOL informing her that it had
launched an investigation of her "business" to determine whether she
remained eligible for benefits.

Karin called the DOL again and says this time she was told that the
state considered her self-employed, which would require her to claim
earnings each time she received an AdSense check. She called back to
get another opinion, and Karin says this time she was informed by yet
another state official that she needed to declare that she was working
every time that she updated her blog.

Meanwhile, New York State has informed Karin that she is ineligible
for unemployment benefits while its investigation is ongoing.



Several phone calls by Forbes to the Department of Labor failed to
yield a clear response as to whether New York State regards Google
AdSense payments as residual or self-employment income. Such payments
are "uncharted territory" and questions of eligibility are "very case
specific," according to a DOL spokesman.

Karin, meanwhile, has pulled AdSense from her Web site. "It's
frustrating that nobody seems to have a straightforward answer," she
says. "It's even more frustrating that trying to work and generate
additional income, while being straightforward and honest about that
income, is treated with suspicion and punished."

Her total AdSense income: $238.75.

See Also:

Five Financial Steps for the Newly Unemployed

Student Veterans to Receive Emergency Checks