Unemployment and AdSense May Cause Headaches

    October 13, 2009
    Chris Crum

Unemployed bloggers are apparently at risk of losing their unemployment checks (or at least having them drastically reduced) if they include ads on their blogs. That is exactly what happened to a woman named Karin, from New York, according to a recent Forbes piece.

A graduate from the University of Virginia School of Law was laid off by a law firm in New York, but was able to receive $405 a week in unemployment benefits from the state. To make a little extra money to help pay the bills, she started a blog and used Google AdSense. To make a long story short, her benefits were cut to $300 a week. It had taken her 3 months to earn $100 with AdSense.

AdSense adsShe was sent a form to fill out and send to her "employer," and when she called the Department of Labor to get some answers about that, she was told that she shouldn’t have claimed the AdSense payment to begin with because it was considered "residual," which would not make her ineligible for benefits. Fair enough. Unfortunatley for Karin, it only got more complicated from there.

"The call prompted Karin to file another claim with the state and to attach a letter stating she was running a blog and that the Google AdSense revenue it generated was her only source of income," explains David K. Randall of Forbes.com. "A few days later, she received a letter from the DOL informing her that it had launched an investigation of her "business" to determine whether she remained eligible for benefits."

"Karin called the DOL again and says this time she was told that the state considered her self-employed, which would require her to claim earnings each time she received an AdSense check," continues Randall. "She called back to get another opinion, and Karin says this time she was informed by yet another state official that she needed to declare that she was working every time that she updated her blog."

Karin is apparently not getting benefits as long as the investigation is going on, and she hasn’t even made $250 from AdSense.

The situation would likely vary from state to state, but at least in New York, unemployment and AdSense blogs seem to equal nothing but headaches for everybody involved. Mike Masnick at TechDirt does a pretty good job of assessing the situation. "It’s really stunning how various labor departments are simply ill-equipped to handle a modern labor force," he says.

Masnick has his own horror story about out of state labor departments seeking money for an employee that his company hasn’t employed in years. They money sought after is apparently for time that this person wasn’t working there.