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Compensation for training and unemployment

Q: My husband is drawing unemployment. He has gone to school to drive semi trucks, and has graduated and is now in training where he drives cross country with an instructor. He still does not officially have the job, and has to take another test to be hired. He is however being compensated for his training. Does he have to report this to the unemployment office?

A: Created by Congress in the 1930's, unemployment insurance is intended to provide a temporary income for eligible workers who have become unemployed through no fault of their own and who are looking for new jobs. The Massachusetts program is funded by Massachusetts employers through quarterly payments.

In your husband's situation, I had to confirm my understanding of wages while collecting unemployment benefits. I have assumed that your husband is a Massachusetts resident. I contacted Edward T. Malmborg, the Director of the Massachusetts Division of Unemployment Assistance (DUA). When I described your husband's specific situation to Malmborg, he stated "it sounds like wages and should be reported." Any type of income should be reported to the unemployment office and then they can make a determination. It is important to be candid with any and all earnings because the Massachusetts Department of Revenue (DOR) and the DUA are able to share data on earnings and unemployment compensation.

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There is some positive news to share this week. The Massachusetts unemployment rate has dropped to 9.3% in October of 2009. In September of 2009, this rate was 8.9%. This is the first monthly rate drop in the unemployment rate in Massachusetts since June of 2007. Job hunters take note -- industries that added jobs included the professional, scientific and business services; education and health services; and finally government and construction sectors. The national rate for unemployment in October was 10.2%.

Anecdotally, we are also seeing positive signs from our clients. Many of our clients are hiring cautiously and only for specific roles. Some are reporting the need to hire additional talent but are many of our clients are trying to delay any investment until January of 2010. Many of our clients want to ensure that the uptick in their businesses are sustained before making an investment in additional headcount. Some of our clients are considering temporary or contract labor prior to hiring regular full-time employees.


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