What is the definition of "unemployed"?

[ha98ed14]

If you are not currently a W-2 employee, but are seeking that type of employment, does that make you unemployed? What if you have picked up contract work, but it is regular or full time. If someone gives you a 1099 at the end of the year, does that mean you were employed?

[jenfromnj]

I'm not a tax expert (so anyone who is, please feel free to correct me!), but I believe getting a 1099 at year-end technically makes you self-employed. We are actually meeting with our accountant soon to go over withholding and tax implications of my being a 1099 this year, so I can let you know what he says.

[mommylamb]

Unemployed according to the government is someone who is collecting unemployment insurance compensation. If you are not working, but no longer qualify for UI, you do not count in the unemployment rolls. If you are working PT you do not count either. You might be considered under employed in that context. If you file a 1099 or a W-2 you don't count as unemployed.

[wellyes]

Unemployed according to the government is someone who is collecting unemployment insurance compensation.

Exactly. You have to have worked for a company who paid into unemployment insurance, be no longer working, be actively seeking a new job, and qualify for unemployment benefits. So if the paper says that there is a 7% unemployment rate, that does not include independent contractors, SAHM trying to get back into the work force, or people who collected unemployment until the benefit ran out and now have no income but are still looking for a job.

[dcmom2b3]

I don't entirely understand the Q, but I think that the answer lies in how the audience you're addressing in any particular situation defines "employed" and "unemployed." I can't imagine that the IRS form that your income was reported on (W-2 vs 1099) would make any difference, across the board, in determining whether one was employed or not.

[egoldber]

Do you mean who is eligible for unemployment? Or what is the federal government's definition of unemployed? They are not the same thing.

A nauseatingly detailed explanation of who the government considered unemployed can be found here:

http://www.bls.gov/cps/cps_htgm.htm

Here is an excerpt:


Who is counted as unemployed?

Persons are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work. Actively looking for work may consist of any of the following activities:

Contacting:
An employer directly or having a job interview
A public or private employment agency
Friends or relatives
A school or university employment center
Sending out resumes or filling out applications
Placing or answering advertisements
Checking union or professional registers
Some other means of active job search

Passive methods of job search do not have the potential to result in a job offer and therefore do not qualify as active job search methods. Examples of passive methods include attending a job training program or course, or merely reading about job openings that are posted in newspapers or on the Internet.

Workers expecting to be recalled from temporary layoff are counted as unemployed, whether or not they have engaged in a specific jobseeking activity. In all other cases, the individual must have been engaged in at least one active job search activity in the 4 weeks preceding the interview and be available for work (except for temporary illness).