WorkFirst HandBook
Paid & Unpaid Employment
8.2 Self-employment
The Self-employment section includes:
- 8.2.1 What is self-employment?
- 8.2.2 What are self-employment plans?
- 8.2.3 What is the self-employment formula?
- 8.2.4 eJAS Codes
- 8.2.5 Self-employment - Step-by-Step Guide
8.2.1 What is self-employment?
Self-employment occurs when a parent is working as a business owner or independent contractor. Parents working at least 32 hours or more per week at minimum wage, with an approved self-employment plan, may use self-employment as their primary path to independence.
Parents can be deferred from employment services activities for self-employment, if they meet all of the following conditions:
- Working at least 32 hours per week at their business,
- Their business generates income equal to the federal minimum wage times 32 hours per week, after business expenses are subtracted, and
- They have an approved self-employment plan from a local business assistance center.
If the parent does not meet all these conditions, she or he can still be self-employed, but will also need to participate in employment services activities, possibly followed by other WorkFirst activities.
8.2.2 What are self-employment plans?
If a parent wants to pursue self-employment, refer her or him to a local business assistance center (see below - Other Resources). Add the referral to the parent's IRP and give the parent a reasonable amount of time to complete needed actions with the business assistance center. The business assistance center will help the parent pull together the information required for plan approval:
- A business statement of self-employment plan, and
- Profit and Loss statements (or projected Profit and Loss statements, if a new business).
The business assistance center will also provide the parent with ongoing technical support, such as help to:
- Acquire any necessary business, professional or tribal licenses,
- Set up a quarterly business plan, and
- Learn about affordable credit and business training.
The self-employment plan will come back to you so you can decide whether to add self-employment to the parent's IRP and approve any needed support services (like paying for small business training courses) or child care. Developing the self-employment plan with a local business assistance center and accessing ongoing technical support are not countable activities.
8.2.3 What is the self-employment formula?
As shown on the chart below, there is a set formula to use when determining how much income a parent's business is generating, and how this translates into the number of self-employment hours per week. Effective July 16, 2007, ACES will use self-employment data to calculate the average weekly hours of self-employment and display that information in eJAS. The parent must have at least 32 self-employment hours per week (earning 32 hours a week at minimum wage) to be deferred from job search.
| Self-employment formula | |
Definition of Employment: Any legal income generating activity which is taxable under the United States Tax Code or non-taxable under treaty between an Indian Nation and the United States. |
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8.2.4 eJAS codes
When a parent is self-employed, use the eJAS codes:
- RO (other referral)
- JT (job skills training)
- FT (full time employment)
- PT (part time employment)
8.2.5 Self-employment - Step-by-step guide
- The WorkFirst Program Specialist or WorkFirst Social Service Specialist:
- Locates the average weekly self-employment hours that are displayed in eJAS.
- If the parent is earning an amount equal to 32 hours of minimum wage or more and wants to pursue self-employment, defer from employment services activities for three months.
- Send the parent to the local business assistance center for self-employment plan assessment.
- The business assistance center will:
- Decide whether to approve the parent's self-employment plan
- Provide ongoing technical support to parents with viable self-employment.
- Upon receipt of self-employment plan decision, the WFPS or WFSSS:
- If approved, adds self-employment to the parent's IRP, showing the number of self-employment hours calculated, and pays any necessary support services and child care
- If denied, the WFPS or WFSSS refers the parent to employment services activities, with the appropriate number of hours allowing for the part-time self-employment activities.
- If the business assistance center will not approve or deny the plan, uses best judgment to decide whether to add self-employment to the parent's IRP for the next 6-12 months, based on the likelihood of the parent becoming self-sufficient through self-employment. Consider:
- Family size,
- Amount of income generated by the business, and
- How long the parent has been on WorkFirst.
Resources
Related WorkFirst Handbook Sections
Other Resources
- Small Business Development Centers (SBDC)
- Service Core of Retired Executives (SCORE)
- EAZ Manual: WAC 388-450-0085 Does the department count all of my self-employment income to determine if I am eligible for benefits?
