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W2 employee contract

Posted on 2006-11-19
Medium Priority
Last Modified: 2008-02-01
I would like to know if W2 employee who has worked for 1 or 2 year contract is entitled to unemployment after the project is over?

Question by:jskfan
LVL 57

Accepted Solution

giltjr earned 400 total points
ID: 17974951
You might find your answer here:


Typically unemployment is for fulltime employee that lost their job due to no fault of their own.   If you were a W2 contractor I am not sure if you would qualify as a fulltime employee, you were/are a contract employee.  Which implies a limited time of employment.

It is my understanding that:  

If you had a contract that stated your are to complete "X" and you completed it, then you did not lose your job.  If you had a contract that stated you will be hired for 24 months and at the end of 24 months they did not keep you, then no.  In both situtation you completed the terms of your employment and so you would not be able to collect unemployment benifits.

Now, if you were let go before the terms of the contract were up, you MIGHT be able to collect.    There may also be specific laws within your state.
LVL 30

Assisted Solution

pgm554 earned 200 total points
ID: 17981437
Been there done that.

Worked for Teksystems and TAD,you just need to meet the minimum time worked according to state law.

If you look at your paycheck ,you payed into unemployment tax.

It's the same as being laid off.

If you quit,then this does not apply.
LVL 14

Assisted Solution

arthurjb earned 400 total points
ID: 17990897
If it was truely a W2 contract, then the employee probably signed a document agreeing that unemployment insurance was not part of the deal.

But, many companies fail to follow the law.  If you paid into your state's unemployment insurance (this can be seen on your paystub) and you worked the minimum required time, then you should be able to collect.  (Minimum time is often as short as 60 days.)

True contract employees are paid usng a 1099.  in most states the W2-contractor status is a myth, and the so-called contractor is by law an employee entitled to full benifits.

One piece of advice, ask the state employment office before going to a lawyer, since the lawyer may charge a fee for doing nothing...

Of course full disclosure applies, I am not a lawyer, and various states have different rules and laws.

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LVL 57

Expert Comment

ID: 17991131
Umm, I live in Virgina and I am fairly sure that employees don't pay unemployment insurance.  Only the employer does.  I know that I have never see any deductions for it specifically on my pay-stub.

I will agree that the W2-contractor is a myth.  I have never seen a real contractor fill out a W2.  Part-time, yes.  Not even sure about a temporary employee, the only temporary employees I have used were though firms that specialized in temp  and temp-perm placements.  I paid the firm and the firm paid the employee.

Now, some places require you to sign a contract of employment, which is different from being a contractor.  You are a regular full-time employee however the company can choose not to renew your contract and the end of it term.  Although this sounds like a contractor, it is legally different.

I know I worked for a public school system that worked that way and I had a normal W2.

Author Comment

ID: 17994839
in this case after signing a contract and working as W2 employee, if I find another job I can quit with no notice and it will have no downside on me.

LVL 57

Expert Comment

ID: 17995312
That depends on what is stated in the contract and what your state laws are.  Also, just in case somebody who is in that situation reads this, it also beleive it depends on if you are a US citizen (or have a green card) or you are a H1B Visa holder.  I don't think H1B Visa holder can just quit one job and go to another one.

Example:  Where I currently work all of your vacation that you accrue is available for you to use on Jan. 1.  A new employee gets two weeks a year.  So say you started on Jan. 1, you have two weeks you can use on day one, but you have not earned them yet.  So on June 21 you took two weeks off.  Then you came in and quit the day you got back from vacation.  Well you have only worked for the company for 6 months, so you have only earned 1 week of vacation and you took two. You owe the company money for the other week of vacation that you took, but had not earned yet.
LVL 14

Expert Comment

ID: 18003716
As you can see nothing is simple.

Even if you signed a contract, some state laws give employees "Rights" which means that you can't be asked to sign them away.

So, (in many places) even if your employer claims that you can't get unemployment benifits, you still can.  And I don't think there are any states where you can sign away worker's compensation rights.  (That is on the job injury insurance.)

Again this appliws to folks who use w2 rather than 1099.  

Folks using a 1099 are truly contractors and are not covered by the normal employee protections.  Of course there are exceptions, and many employers break the law by using 1099 when the law states they should be using w2.  That is where we get to the myth of w2 contractor...

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