Being your own boss isn’t always the dream job it portrayed as. Although setting your own hours and the satisfaction of knowing all your work is going towards your business are nice perks, self employment is not without its drawbacks. For instance, you must pay your own social security, Medicare and you do not receive unemployment benefits. However, it is possible you consider yourself self-employed and still be eligible for unemployment insurance in Michigan. How is this possible?

Let’s start by stating what the Michigan Employment Security Act has to say about unemployment insurance and self-employed workers. For starters, the law says that only insured employees of registered employers in Michigan are eligible for UI benefits. This disqualifies self-employed workers although it does include the employees of self-employed workers. However, the Michigan Employment Security Act defines self-employment by the type of relationship between employer and employee not by the agreement or understanding between two parties. What does this mean? Well, even if you consider yourself self-employed and your have a written agreement to work as a contractor for another individual or company, you are an employee if you meet the definition of an employee as set by the Michigan Employment Security Act.

For example, if you work as a plumbing contractor and invoice a client as a self-employed contractor but use the main contractor’s materials and tools, follow the work schedule set by the main company and barely work for any other clients, you may be considered an employee and therefore deserve to receive unemployment benefits if you lose your job or contract.

So what are the guidelines that determine your status as an employee or self-employed worker? There are several factors the Michigan UIA takes into account when assessing the status of a self employed worker. For example, the UIA may ask the following questions to determine if an employee is being treated as a self-employed worker.

- Is the work carried out by the self-employed worker an integral part of the work generally performed by the main contractor?

- Does the “self-employed” worker depend entirely on the payment (or wages) of a single client?

- What level of control does the self-employed worker have while working? Can he, or she, hire or fire his own workers?

- Does the self-employed worker advertise his or her services elsewhere to the public?

- Does the employee (or self-employed worker) pay for his own materials and tools or does he rely on the materials provided by an employer?

The answer to these questions and the evidence presented by the employer and the employee will determine what status a worker is granted.

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