Adjunct Law Prof Blog

Editor: Mitchell H. Rubinstein
New York Law School

Sunday, July 24, 2011

Principal in Corporation Not Entitled To Unemployment Compensation


Matter of Ingrao-Woods v. Commissioner of Labor, ___A.D.3d___(3d Dep't. March 17, 2011), is illustrative of an important point in unemployment insurance law. If your a principal in a corporation your not totally unemployed under the statute and therefore, you are not eligible for unemployment. As the court explained:

It is well settled that "[a] claimant who is a principal in an ongoing corporation will not be considered totally unemployed if he or she stands to benefit financially from its continued operation, no matter how minimal the activities performed on its behalf" (Matter of Bernstein [Commissioner of Labor], 67 AD3d 1287, 1287-1288 [2009]; see Matter of Thomas [Commissioner of Labor], 58 AD3d 1099, 1099-1100 [2009]). Here, claimant established a Web site, opened a business checking account, paid routine business expenses, distributed business cards, advertised products, actively sold products and deducted business expenses and losses on her partnership tax returns during the relevant period. Although the business did not make a profit, claimant clearly stood to gain a monetary benefit as a result of her [*2]activities. Therefore, substantial evidence supports the Board's decision that she was not totally unemployed (see Matter of Gazzara [Commissioner of Labor], 60 AD3d 1226, 1227 [2009]; Matter of Germanow [Commissioner of Labor], 56 AD3d 923, 924 [2008]; Mater of Siegel [Commissioner of Labor], 43 AD3d 1224, 1225 [2007]).

Mitchell H. Rubinstein

Employment Law | Permalink


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