Workers who lose their jobs in several states may be able to collect unemployment benefits while launching their own businesses instead of immediately searching for another job, Founder Brew reports.
Self-Employment Assistance programs allow eligible unemployment recipients to focus full-time on starting businesses while continuing to receive weekly payments equivalent to regular unemployment benefits.
Participants can also receive entrepreneurial training, business counseling, and technical assistance.
Agencies in Oregon, Washington, Mississippi, New York, and New Hampshire confirmed they currently operate active versions of the program.
The federal Self-Employment Assistance program was authorized under the North American Free Trade Agreement Implementation Act of 1993.
Congress later permanently authorized the program in 1998. States may opt in, but must establish their own programs under federal requirements.
Unlike traditional unemployment insurance, which generally requires recipients to search for work, Self-Employment Assistance participants can devote their time to establishing a business. Participants may also be able to continue receiving benefits while earning income from their new businesses, depending on their state’s program.
Eligibility requirements vary.
New York, for example, requires participants to complete at least 20 hours of entrepreneurial training and meet with a business counselor at least twice. Applicants must first qualify for regular unemployment benefits before they can be considered for a self-employment program.
Washington considers factors including an applicant’s occupation, education, and location when determining eligibility.
“The range of ages and experience and personal characteristics is all over the board,” Gary Long, a supervisor for Washington’s program, told the outlet.
Long said a major consideration is whether an applicant is likely to “find a replacement job before exhausting their benefits.”
Workers in occupations with strong employment prospects may therefore be less likely to qualify. Washington’s approved occupations this year have included project management specialists, computer and information systems managers, business operations specialists, and urban and regional planners.
The criteria can change as regional economists and workforce development officials evaluate labor market conditions, Long said.
For eligible unemployed workers, the programs offer another route back into the workforce — not by finding a new employer, but by potentially becoming one.
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