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  1. #1
    Join Date
    Sep 2011
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    15

    Default Told I Was Being Laid Off, then Asked to Submit a Letter of Resignation

    My question involves unemployment benefits for the state of: TN
    Bolded questions below.

    My job responsibilities depend on the company bringing in enough work for me to do. Since we've been slow, I've had little to do.
    The boss told me that he was laying me off because they couldn't afford to pay my W2 salary during downtime.
    He said, however, that he would contract me 1099 as work picked up, effectively just paying me for productive time.
    His words were, "So, you're fired, but not exactly, haha"
    I asked if there was any other way and he said, "Either you're let go and you contract with us, or you're just let go."

    After warming up to the idea of 1099 work, I'm pretty excited about the possibilites. We negotiated a pretty good deal for both of us and I'm just waiting to sign some 1099 paperwork.

    Today however, he asks for a letter of resignation that should include:
    Amicable recognition by both parties
    Intent to 1099 contract in the future
    Date of resignation

    I'm wondering if he is doing this to avoid paying any unemployment claims?

    Say, worse case scenario, we don't have contract work for 3 months, and during that 3 months I'm not able to find other employment - either 1099 or W2 - I'd like to have those benefits to get me by.

    If I want to file for unemployment, then I won't get it because of this resignation letter, correct?

    Or is there a way to mutually agree to resign like this and still get unemployment?

    I feel like signing a resignation letter is going to burn the last piece of protection I have if things don't work out.
    If given the option, is it better to just let him lay me off, rather than resign, so that I still have access to this?

    (One thing that I want to point out is other threads say it's a case by case thing and in a forced-resignation situation you could still get unemployment benefits, but other threads say you won't unless you're laid off. Definitely need some clarification here.)

    Also, not sure if they somehow didn't pay their unemployment tax, what happens to them when/if I file. Maybe that's a problem so they don't want to pay out of pocket?

    Let me be clear by saying that if unemployment is going to come out of their pocket, then I don't want to rock the boat because I'd like to maintain this contract, but if they paid their unemployment tax, then there should be no money out of pocket right?

  2. #2
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    17,600

    Default Re: Told I Was Being Laid Off, then Asked to Submit a Letter of Resignation

    If you were in almost any other state I'd go with the forced-resignation situation meaning you get UI, but TN would just as soon no one got UI so I wouldn't risk it.

    The thing of it is, the rate at which your employer pay their unemployment is determined by how many claims they have. The more claims, the higher the percentage they pay. So it is to their benefit that no claims get filed, even if they did pay as required.

  3. #3
    Join Date
    Oct 2006
    Posts
    5,918

    Default Re: Told I Was Being Laid Off, then Asked to Submit a Letter of Resignation

    I absolutely would not sign the letter of resignation, and I also wouldn't accept a 1099 contractor situation in a situation where I was formerly employed.

  4. #4
    Join Date
    Sep 2011
    Posts
    15

    Default Re: Told I Was Being Laid Off, then Asked to Submit a Letter of Resignation

    @working, I'm curious why you wouldn't accept the 1099? Basically, I'm getting paid a contractor rate, as opposed to my old salary. So I'm getting more pay for less hours (time worked vs time in a chair) and it's enough to cover most of my taxes. It's likely that after this month, I'll have a couple months of downtime because of their schedules. But since I'm 1099 I can pick up other work at the same time.

    @cbg, so they only pay a rate of like, what like 1-5%. Is there any way a business could have NOT paid that and now will have to back pay the govt?

    I checked my eligibility and I'd get max in this state. I just don't want that to come out of my employers pocket. I thought the way that worked is they pay their UI, then it pays out whatever to the ex-employee. Therefore the company isn't directly paying the employers benefits. Kind of like car insurance.

  5. #5
    Join Date
    Mar 2013
    Posts
    4,504

    Default Re: Told I Was Being Laid Off, then Asked to Submit a Letter of Resignation

    Your boss is scamming you. Don't fall for it.

    Once you turn in the resignation there's no guarantee that he'll have any work for you at all and there won't be a thing you can do about it if he doesn't.

    My vote: Don't resign. Let him fire you. File for unemployment compensation and you'll have a steady stream of income while you are looking for another job and he's trying to find another sap.

  6. #6
    Join Date
    Sep 2011
    Posts
    15

    Default Re: Told I Was Being Laid Off, then Asked to Submit a Letter of Resignation

    Thanks for the info.

    Now one more question: If I do take 1099 contract work from somewhere else, and it trumps my benefit income, can I reopen the unemployment claim (26 week maximum payments in TN) after that 1099 contract has ended?

  7. #7
    Join Date
    Mar 2013
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    4,504

    Default Re: Told I Was Being Laid Off, then Asked to Submit a Letter of Resignation

    Quote Quoting kraftymonkey
    View Post
    Thanks for the info.

    Now one more question: If I do take 1099 contract work from somewhere else, and it trumps my benefit income, can I reopen the unemployment claim (26 week maximum payments in TN) after that 1099 contract has ended?
    That's something you should be asking of the TN UI agency.

    Generally, if you are in business for yourself (that's what 1099 contract work means) you are not eligible for unemployment compensation. Some states treat that differently from others so the TN UI agency is where you need to get your answer from.

  8. #8
    Join Date
    Sep 2011
    Posts
    15

    Default Re: Told I Was Being Laid Off, then Asked to Submit a Letter of Resignation

    Thanks adjuster. Yeah I read on other forums that people have reported 1099 as non-earned income with success (especially in the state of california). I've put together a list of things to as the tn ui.

    On a positive note, I just got off the phone with my boss and he said he just thought the formal resignation would be the best thing and save him a bit of paperwork. He completely understood the need for unemployment as a safety net and said he'll go through the proper channel with the HR company to lay me off 'without cause' so that I can file an undisputed claim

    Thanks so much for the help!!!

  9. #9
    Join Date
    Mar 2013
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    4,504

    Default Re: Told I Was Being Laid Off, then Asked to Submit a Letter of Resignation

    Quote Quoting kraftymonkey
    View Post
    On a positive note, I just got off the phone with my boss and he said he just thought the formal resignation would be the best thing and save him a bit of paperwork.
    Translation: Save him a lot of money.

    Quote Quoting kraftymonkey
    View Post
    He completely understood the need for unemployment as a safety net and said he'll go through the proper channel with the HR company to lay me off 'without cause' so that I can file an undisputed claim
    Until you actually file the claim and he sends in the verification form saying "he quit, here's his resignation letter."

    He knows full well he'll be charged for your UI benefits.

    He's playing you.

  10. #10
    Join Date
    Sep 2011
    Posts
    15

    Default Re: Told I Was Being Laid Off, then Asked to Submit a Letter of Resignation

    Quote Quoting adjusterjack
    View Post
    Until you actually file the claim and he sends in the verification form saying "he quit, here's his resignation letter."
    If he sent a non-existant resignation letter he would be in big trouble for lying right? Maybe I wasn't clear. He's NOT asking for a resignation letter anymore. Just filing the paperwork for laid-off. He's paid unemployment benefits for other worker before.

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