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Commissions and Unemployment Benefits

Commissions and Unemployment Benefits

Below is guidance from NHAR legal counsel Matt Johnson on the matter of commissions and unemployment benefits and the legality of collecting both.

Here's a question that may be on the minds of some New Hampshire Realtors: What do I do if I'm collecting unemployment benefits and I receive a commission check or other compensation?

As an independent contractor, historically you have not been able to qualify for or receive unemployment benefits. The CARES Act has changed that and allowed independent contractors to receive unemployment benefits under certain circumstances. Specifically, a question has arisen regarding what happens if you receive a commission check for a deal that closes and you are currently receiving weekly unemployment benefits. 

The CARES Act is so new that there is no clear guidance on this issue. However, earlier guidance from the Department of Employment Security concerning receiving earnings, including commissions, while receiving benefits, is instructive. A copy of that prior guidance is attached here for your reference.

The Department has indicated that you must disclose to the Department any earnings you receive, from any source, in the week in which it is earned, not when it was paid to you. For real estate commission checks, I believe that means in the week when the transaction closed. The Department will then determine whether to reduce or disqualify you from receiving further benefits for a period of time based on the size of the commission payment relative to your regular earnings. You may also have to close and then later reopen your claim. The Department has not issued any guidance to my knowledge on how it will perform this calculation for independent contractors.
 
My advice under the present unique circumstances is to plan ahead. If you know that a transaction is likely to close soon, reach out to the Department and try to obtain direct guidance on how to update your claim when the commission check or other earnings are received by you. Give yourself plenty of time, as the Department is very busy right now. Keep track of the name of the person who gives you the advice at the Department and follow it. This will put you in the best position to obtain and keep whatever unemployment benefits you are entitled to receive.

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Amidst the sea of change to which the New Hampshire Association of REALTORS has played witness in its 85 years, one thing that has remained constant is the Realtor 'R' and the value we bring to every real estate transaction in which we take part. We are part of a unique community where our familial cooperation transcends our business competition. These are not mere platitudes, but our living ideals, and they are, in fact, the foundation on which we conduct ourselves in our day-to-day affairs.

 

Marc Drapeau, 2020 President, New Hampshire REALTORS

Marc Drapeau, 2020 President, New Hampshire REALTORS