Tough economic times can bring a decline in sales to car lots, real estate agencies and other businesses where employees traditionally work on commission. Though you may technically still have a job with one of these businesses, if you're not making sales, you don't bring home any income, and the effect on your family is the same as if you lost your job. You may or may not qualify for unemployment benefits to carry you through to better times.
Employee vs. Contractor
In some jobs, if you work on commission only, you're considered a self-employed contractor and not an employee of the company. One test of this is how much control the employer has over your schedule. If you're free to work as much or as little as you want, setting your own schedule, then you're a contractor, not an employee. If your employer doesn't withhold taxes from your checks, you may be a contractor and not an employee. Some contractors, such as real estate agents or hairdressers, lease space in an office from a business, but they're considered self-employed. In most states, self-employed people aren't eligible to collect unemployment benefits.
Even if you're an employee of a business, if you work only on commission, you may not be eligible for unemployment benefits. Many states exempt employers from paying unemployment insurance premiums for commission-only salespeople, so these individuals aren't covered by the unemployment insurance program. If you work on salary plus commission, you may be eligible for benefits due to underemployment. Your benefit would be based only on the salary portion of your previous paychecks. If you're still receiving that salary, you may not be eligible for benefits.
One of the requirements for receiving unemployment benefits is that you must look for work and be available for work. If you continue in a commission-only sales position, you aren't available to look for a new job, or take one if it becomes available. If you're eligible to collect unemployment, you'll still need to look for new work, even as you wait for work at your current job to pick up. You may be required to accept any new job in your field.
Check with your state unemployment office to see if you qualify for benefits. Some states exempt commissioned salespeople in specific industries, such as real estate or insurance. In these states, other commissioned salespeople do qualify for benefits, regardless of whether they are paid on a commission-only basis or not. Money you earn while claiming unemployment could reduce your unemployment benefits. Some states have eligibility requirements that state your income must have fallen by a certain percentage in order for you to receive benefits. Your state unemployment office can tell you if you're eligible for benefits, and how much you could expect to receive.