04 Self-Employment Definition
Self-employment is defined as working for oneself rather than an employer.
This does not apply to Corporations or
Limited Liability Companies (LLC) that file taxes as corporations. (See
Corporation Profits.)
When determining whether income meets the self-employment definition all factors relating to the income source must be explored with the participant. The factors to consider include, but are not limited to, the following:
●Existence of an employer - employee relationship
NOTE Self-employed participants do not have an employer - employee relationship with the person or business that they work for.
●Obligation to pay for work related expenses
●Responsibility for obtaining jobs or sales
●Responsibility for scheduling work
●Responsibility for risk of income gain or loss
Self-employment may include, but is not limited to the following situations:
●Income received directly from one's own business, a sole proprietorship, as an independent contractor, or as a member of a partnership.
●Income received from odd jobs or from irregular and varied activities.
●Income received from providing services.
●Income received from selling or reselling goods, including personal property and items purchased for the purpose of resale.
●Income received from working for others on a commission or piecework basis.
The participant has an employer - employee relationship when the person or business they work for is responsible for any of the following:
●Directing and controlling the hours or manner in which the participant performs work.
●Paying the participant’s withholding taxes.
●Providing work related training to the participant.
●Covering the participant’s liability insurance or workers' compensation.
●Providing benefits, such as insurance, pension, or paid leave to the participant.
●Reimbursing the participant’s work-related expenses.
Self-employed participants may or may not incur identifiable
self-employment expenses.
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The case file(g) must be documented with the reason the income was determined as self-employment income or earned income. |
(See
Self-Employment Types for additional policy and procedures)
For examples, see the following: