Unemployment insurance laws in states like Illinois explicitly prohibit student employees from unemployment compensation, since these students already receive government-subsidized funds toward their educational expenses. However, a work-study student employee who lost a previous full-time job is not restricted from unemployment benefits as long as he meets the requirements, and he must have lost his full-time job through no fault of his own to qualify for unemployment benefits.
Work-Study and Unemployment
Employers must pay state and federal unemployment insurance taxes for traditional, full-time employees in the event these employees ever become unemployed. Employers are not required to pay these taxes for nontraditional, temporary employees, such as work-study student employees. Since work-study jobs are considered non-permanent jobs, work-study student employees are not entitled to unemployment benefits from their work-study job alone. If a work-study student held a full-time job prior to his work-study position and meets the requirements for unemployment benefits through that job, he can collect unemployment benefits while on a work-study program.
Reporting Work-Study Earnings
While work-study income does not count toward qualifying for unemployment benefits, a work-study student who qualifies for unemployment compensation via another job must report his wages from his work-study position to his local unemployment office. According to the Borough of Manhattan Community College's website, New York’s Department of Labor considers it "willful misrepresentation" when a work-study student who also receives unemployment compensation fails to report his work-study earnings to his local unemployment office. Failure to report your work-study wages during the weeks you receive unemployment compensation is considered fraud, and you could face penalties and a back-pay order where you must pay back any benefits you received to your state’s labor board.
All unemployment recipients must be available for re-employment opportunities, including college students. If a job opportunity arises that interferes with your class schedule and your current work-study position, you must either rearrange your schedule to accommodate the work hours required for the job, even if accepting the job offer requires that you drop a course or leave school entirely, according to Michigan‘s Unemployment Insurance Agency. Otherwise, your state labor department will reduce your benefits or stop them altogether if you refuse a re-employment opportunity.
Some states provide unemployment benefits for students who are enrolled in state-approved school or training programs, regardless of whether they receive work-study income or not. For example, New Jersey’s Department of Labor and Workforce Development provides unemployment benefits for students who are attending school or training programs that are state-approved to improve the student’s employment opportunities. These rules vary by state, as each state administers its own unemployment insurance program, so check with your state’s labor board or employment division for further details.
- Illinois Department of Employment Security: Illinois Unemployment Insurance Law Handbook
- United States Department of Labor: Unemployment Insurance Tax Topic
- New Jersey Department of Labor and Workforce Development: Requirements for Payment Full-Time Student
- Michigan Unemployment Insurance Agency: Eligibility (Ability, Availability, Seeking Work, Reporting, Participating in Profiling)
- Borough of Manhattan Community College: Financial Aid -- Federal Work-Study Program