Alabama Administrative Code › Title 480 - ALABAMA DEPARTMENT OF LABOR › Chapter 480-4-3 - BENEFITS › Section 480-4-3-.24 - Benefit Eligibility As Affected By Self-Employment

Current through Register Vol. 42, No. 9, June 28, 2024
(1) Self-employment is disqualifying under
			 Section 25-4-78(11) of
			 Alabama Unemployment Compensation Law. While the law itself does not provide a
			 definition as to what constitutes "self-employment", it's dictionary definition
			 is: "a remunerative activity of a personal, self-directed nature".
			 Determination policy is that an individual is not automatically disqualified
			 because he engages in such an activity, but is deemed to be self-employed only
			 if he devotes a "substantial and considerable amount of time all is construed
			 to mean an amount exceeding fifty percent of a normal work week. The amount or
			 absence of income from the activity is totally immaterial. Disqualification, if
			 imposed, is based upon the amount of time devoted to the activity.
(2) Self-employment may consist of many,
			 widely divergent activities, all of which come within two broad, but generally
			 distinguishable categories. One category consists of the performance of
			 services for another in the capacity of an independent contractor. The other
			 category consists of business ventures such as the production of crops, the
			 manufacture and sale of a product, buying and reselling merchandise, etc.
(a) Performance of Services as an Independent
			 Contractor. A distinction between the performance of "services" as an
			 independent contractor and the performance of "personal services" must be made,
			 since remuneration for personal services constitutes "wages" for
			 disqualification under Section
			 25-4-71 of unemployment
			 compensation law, wherein a claimant is deemed "not unemployed".
1. Independent Contractor. Payments made for
			 services rendered by an independent contractor are not "wages". Income from
			 this category of self-employment is not remuneration for the performance of
			 personal services and therefore does not come within the definition of "wages".
			 If the individual is not disqualified as being self-employed, such income has
			 no effect upon eligibility.
Services performed by an independent contractor are under the
				control of the contractor. Usually an agreement is made to perform specific
				work for a price agreed upon in advance, and related expenses are the
				responsibility of the contractor. He controls how, when, where, and whom the
				services are performed. He may hire, direct and pay assistants. He may have an
				office, maintain supplies and equipment, hold a license, and advertise his
				services.
To be an independent contractor, a worker must be in a position
				to suffer a loss or realize a profit as a result of his services. This differs
				considerably from the position of an employee whose sole function is to provide
				personal services in return for wages.
2. Performance of Personal Services.
			 "Personal Services" is defined as "the expenditure of human effort in the
			 performance of an act or task". The performance of personal services indicates
			 an employer- employee relationship--the employee providing personal services,
			 the employer providing direction and control. Under the common-law test, a
			 worker is an employee if the person for whom he works has the right to direct
			 and control him in the way he works, both as to final results and as to the
			 details of when, where, and how the work is to be done. The employer need not
			 actually exercise control; it is sufficient that he have the right to do
			 so.