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In WA State, how does contingency-fee work affect a claim for unemployment benefits?

Tacoma, WA |

I'm a newly unemployed professional in WA State. While I'm looking for a full-time job, a business has offered to engage me as an independent contractor. In short, the business would bill its clients for my work on an hourly basis, and it would pay me for my work if, "only if," and when the business' client pays *its* invoice. So, it's more like an hourly contingency fee arrangement than a wage or a fee that I know for certain that I'll collect.

If I work for the business under these terms, under WA law, how would it affect my weekly unemployment claim? Must I disclose my work at the time that I do it, even though I don't know whether or when I'll be paid for that work? If you could please direct me to legal authority that supports your analysis, I would really appreciate it. Thanks.

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Attorney answers 1

Posted

I don't have the legal authority at my hand, but I do know that Washington law requires you to report all income that you have while you are on unemployment. So, if you are doing this make sure you disclose this to the State.

Asker

Posted

I appreciate your time, but I don't think you've answered my question. To clarify, in short, my question is whether a contingency fee *is* income that I must declare during the week that I work, even though (1) I won't be paid unless the business with which I contract is paid, and (2) it's *uncertain* whether the business will be paid and I'll thus be paid. It's analogous to an attorney's contingency fee in a lawsuit: You can work your tail off, but you don't generate income unless your client gets paid.

Asker

Posted

I appreciate your time, but I don't think you've answered my question. To clarify, in short, my question is whether a contingency fee *is* income that I must declare during the week that I work, even though (1) I won't be paid unless the business with which I contract is paid, and (2) it's *uncertain* whether the business will be paid and I'll thus be paid. It's analogous to an attorney's contingency fee in a lawsuit: You can work your tail off, but you don't generate income unless your client gets paid.

Asker

Posted

I appreciate your time, but I don't think you've answered my question. To clarify, in short, my question is whether a contingency fee *is* income that I must declare during the week that I work, even though (1) I won't be paid unless the business with which I contract is paid, and (2) it's *uncertain* whether the business will be paid and I'll thus be paid. It's analogous to an attorney's contingency fee in a lawsuit: You can work your tail off, but you don't generate income unless your client gets paid.

Asker

Posted

I appreciate your time, but I don't think you've answered my question. To clarify, in short, my question is whether a contingency fee *is* income that I must declare during the week that I work, even though (1) I won't be paid unless the business with which I contract is paid, and (2) it's *uncertain* whether the business will be paid and I'll thus be paid. It's analogous to an attorney's contingency fee in a lawsuit: You can work your tail off, but you don't generate income unless your client gets paid.

Asker

Posted

I appreciate your time, but I don't think you've answered my question. To clarify, in short, my question is whether a contingency fee *is* income that I must declare during the week that I work, even though (1) I won't be paid unless the business with which I contract is paid, and (2) it's *uncertain* whether the business will be paid and I'll thus be paid. It's analogous to an attorney's contingency fee in a lawsuit: You can work your tail off, but you don't generate income unless your client gets paid.

Asker

Posted

I appreciate your time, but I don't think you've answered my question. To clarify, in short, my question is whether a contingency fee *is* income that I must declare during the week that I work, even though (1) I won't be paid unless the business with which I contract is paid, and (2) it's *uncertain* whether the business will be paid and I'll thus be paid. It's analogous to an attorney's contingency fee in a lawsuit: You can work your tail off, but you don't generate income unless your client gets paid.

John William Ladenburg

John William Ladenburg

Posted

Sorry for the delay in answering. Under standard accounting methods, you only earn the money when you have the money, not when it is promised, unless you use an accrual method of accounting in your business. In any event, you might be able to ask someone at the State and get an answer, it's most important how they would look at it.