Unemployment Benefits for Contractors and the Self-Employed

If you are considered an independent contractor or are self-employed, you may still be eligible for Nebraska Unemployment Benefits.  One way to be eligible is to make the election to be a part of the Nebraska unemployment benefits system while you are still employed.  



Election to be a part of Unemployment Insurance 

Pursuant to Neb. Rev. Stat. 48.115(10) if you are working on a full-time basis you can elect to bring yourself within the provisions of the Nebraska Workers' Compensation Act. You have to file the election in writing with the Nebraska workers' compensation insurer. The election is effective upon receipt and remains in effect until the election is terminated, in writing, or until the insurer ceases to provide coverage for the business, whichever occurs first.


Independent Contractors

It is common to encounter misconceptions about who is and who is not an independent contractor. For Nebraska unemployment benefits purposes, services provided by an independent contractor are exempt. This means no tax is owed of unemployment benefits and no benefits can be paid to unemployed workers in Nebraska based on services provided as an independent contractor. However, Nebraska statutes §48-604(5) includes a test to define an independent contractor relationship.  This statute controls who is or is not an independent contractor. The requirements extend far beyond simply calling an individual an independent contractor or having a worker sign an independent contractor agreement.

The statute creates a three-part conjunctive test which is not the same as the 20 point test used by the Internal Revenue Service. All three parts of the test must be met for an individual to be exempt from Nebraska unemployment benefits as an independent contractor. The test is sometimes referred to as the A-B-C test. Payment for services will be considered employment unless and until it can be shown that:

a. such individual has been and will continue to be free from control or direction over the performance of such services, both under his or her contract of service and in fact,

b. such service is either outside the usual course of the business for which such service is performed or such service is performed outside of all the places of business of the enterprise for which such service is performed, and

c. such individual is customarily engaged in an independently established trade, occupation, profession, or business. 

If you need an unemployment benefits attorney consider hiring Madathil Law Office.  If you live in Omaha, Lincoln, Lancaster County, Douglas County, Otoe, or Cass Counties and you need an employment lawyer , consider contacting Angela Y. Madathil and the Madathil Law Firm.   The firm serves clients in all of these areas.

Contact us at angela@madathil-law.com or by telephone at 402.577.0686.  For more information feel free to look at our website www.madathil-law.com.

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