Unemployment Status - Section 8-801 - Maryland Unemployment Decisions Digest - Appeals

Introduction

The provisions dealing with unemployment status were previously located in Article 95A, Section 20(l) of the Annotated Code of Maryland. After the law was revised in 1991, these provisions were recodified as Section 8-801 of the Labor and Employment Article of the Annotated Code.

Section 8-801 requires that in order to be eligible for benefits, a claimant shall be unemployed. A claimant is considered to be unemployed in any week during which the claimant: (1) does not perform work for which wages are payable; or (2) performs less than full-time work for which wages payable are less than the claimant's weekly benefit amount plus allowances for dependents.

As used in Section 8-801, the term "wages payable" is properly construed as meaning "wages currently payable" and not "wages legally due and payable upon a contingency." Waters v. Maryland Unemployment Insurance Fund, 220 Md. 337, 152 A.2d 811 (1959).

Unemployment Status - Section 8-801

I. In General

A. Separation Not Required
A claimant on leave of absence is unemployed under Section 8-801 even though there remains some connection between the claimant and the employer such as continuation of medical insurance benefits, seniority rights and a guaranteed return date. Such circumstances are often characteristic of a layoff. These factors are irrelevant to the statutory definition of unemployment contained in Section 8-801. The crucial test is whether an individual has performed services with respect to which wages are paid or payable. Fourtinakis v. Johns Hopkins University, 870-BH-81.

The claimant, a rural carrier relief employee for the Postal Service, is unemployed under Section 8-801 for each week in which he earns less than his weekly benefit amount. The fact that he is not "separated" from the employment is not relevant. The intent of the law is to encourage a person to work, even if part-time work is the only work available to him, by allowing him to collect the difference between his weekly benefit amount and his earnings. Helmstetter v. United States Postal Service, 1507-BR-82.

B. Partial Unemployment
A claimant is not "unemployed" within the meaning of Section 8-801 where he is employed on a full-time basis, even though he earns less than his weekly benefit amount plus allowances for dependents. The Section 8-801 definition specifically requires that a claimant have less than full-time work during each benefit week in question. Barclay v. Freeway Gulf Station, 839-BH-83.

Where a claimant earns $50.25 per week for "less than full-time work" and his weekly benefit amount is $40.00, the claimant's wages exceed his weekly benefit amount and he is not unemployed within the meaning of Section 8-801. Omisore v. Dundalk Community College, 590-BR-84.

During the week ending December 10, 1988, the claimant was in claim status. She was employed by two different employers during this week, both on a part-time basis. The claimant worked for the YMCA that week for three days, two hours each day, at the pay rate of $7.00 per hour. The claimant earned $42.00 for the week. During the same week, she also worked part-time for Sojourner-Douglas College earning $47.54. The claimant's total earnings for the week ending December 10, 1988 were $89.54. Her weekly benefit amount was $181.00. The claimant earned less than her weekly benefit amount during the week ending December 10, 1988. Therefore, she was unemployed within the meaning of Section 8-801 and is entitled to payment of partial benefits. Patterson, 777-BH-90.

II. Performance of Services for Which Wages are Payable

A. Performance of Less Than Full-Time Work
In determining whether a claimant performed less than full-time work under Section 8-801, the question of what is full-time work is a factual one, dependent on what is customary and usual for the particular employment in question. Taylor, 1431-BH-94.

B. Performance of Services
The claimant was deemed unemployed within the meaning of Section 8-801 even though she sold Avon products during the period of her layoff. The sale of Avon products required no active service on the part of the claimant, and she had sold Avon products while employed full-time. Any earnings from Avon would have reduced the claimant's weekly benefit amount. Rose, 755-BH-81.

The proper criteria for the determination of whether a person is unemployed within the meaning of Section 8-801 is whether the person has performed services for which wages are payable during the applicable week. Thus, where a teacher elects to receive her salary for nine months' work over a twelve month period, or where a school crossing guard received payment, after the school year was over, for past services performed, the receipt of this pay for past services is not disqualifying under Section 8-801. Similarly, the performance of services for which no wages are payable is not disqualifying under Section 8-801, though these services could bring about a disqualification under Section 8-903. Hyman v. Bearsch Bus Company, Inc., 831-BR-89.

On February 1, 1991, the employer notified the claimants that they were being permanently laid off. However, they were kept on the payroll until February 28, 1991 and received the same compensation they had been receiving while working. Most of the claimants also received a lump sum "permanent separation amount." During the month of February, the claimants were told that they should either report to work or visit the career counseling center set up by the employer in a different location. All of the claimants were paid, whether they reported to work, reported to the career counseling center, or did neither. The employer failed to show which claimants, if any, performed services during this period. Payments made in weeks during which no services were performed do not take the recipients out of the category of the "unemployed" within the meaning of Section 8-801. Instead, these payments constitute dismissal payments. Since the claimants' jobs were abolished, these payments are not disqualifying under Section 8-1009(a). Abbott et al. v. Westinghouse Electric Corporation, 1458-BH-91. NOTE: See, Introduction, Section 8-1009, this digest for the 1996 legislative changes.

C. Wages Payable
In reaching a determination under Section 8-801 concerning a partially employed claimant, the Board attributed one commission check ($1400) to all of the weeks during which the claimant performed some services toward the receipt of the commission (14 weeks), and concluded that the claimant performed services each week for which wages of $100 each week were payable to him. Since this amount is less than the claimant's weekly benefit amount, the claimant is entitled to partial benefits. Dayton, 199-BR-83.

The test of whether a person is unemployed is whether or not he is performing services for which wages are payable. The exact timing of the receipt of the payments is not relevant. Since the claimant was performing commission sales work and was generating commissions, he was not unemployed within the meaning of Section 8-801, even though those commissions were not paid until a few weeks later. Fallin, 71-BH-88.

The claimant performed no services after March 23rd. Under Section 8-801, he cannot be disqualified from receiving benefits after that date. Although he may have received payments or bonuses after that date, and although they may have been payments for work, they were not payments for work after March 23rd. The receipt of payments for work performed in past weeks does not disqualify a person from benefits under Section 8-801. Bobilin v. Hahn Automotive Warehouse, Inc., 919-BR-89.

D. Back Pay and Liquidated Damages As Wages
Section 8-801 is not the proper basis for a disqualification for a person who receives back pay. Instead, the proper basis for a disqualification is under Section 8-809. Wilburn v. Tressler-Lutheran Service, Inc., 190-BR-84.

III. Self-Employment and Corporate Ownership

A. Self-Employment
The mere fact that a claimant is self-employed orattempting to start his own business, in the absenceof any evidence that he is performing services forwhich wages are paid or payable, does not automaticallydisqualify the claimant within the meaning of Section8-801. However, Section 8-903 eligibility should be carefully examined. Veith, 34-BR-82.

B. Corporate Officer Status
A claimant's status as a corporate officer does not, in and of itself, disqualify the claimant under Section 8-801. However, it is appropriate to closely examine the eligibility of corporate officers under Section 8-903. Gleason v. William J. Gleason and Sons, Inc., 1033-BH-81.

The claimant corporate officer was not unemployed or eligible for benefits under Section 8-801 where he performed services for the corporation for which he was paid. Shepherd, 1234-BH-82.

C. Burden of Proof
Once it is shown that a claimant performed services for his own business and that the business grossed substantial income, the burden is on the claimant to show that none of the business receipts have gone to reimburse himself for the personal services performed on behalf of the business. Failing this, the Board may find that remuneration was made to the claimant. Witt, 550-BH-83.

If a claimant both owns a business and performs any services with regard to that business, the burden is on the claimant to show that the gross profit of the business is not attributable to his services. But where a business has operated for 20 years without the claimant's substantial involvement, and where it has produced a monthly income of $340 based primarily on the services of its one full-time employee, and where the claimant performed no services in many weeks and a maximum of four hours of services in other weeks, the company earnings were not attributed to the claimant's services, and no disqualification was imposed under Section 8-801. Eaton, 571-BR-86.

D. Ownership Status
There is no disqualification under Section 8-801 from receiving the profits derived solely from an ownership interest in a business. Eaton, 571-BR-86.