Oct 2, 2008 8:13 pm US/Eastern
What's Worrying You: 'I'm A Small Business Owner'
MIDDLETOWN, N.Y. (CBS) ―
The financial safety nets in place to help people in trouble often pose a catch-22. That's what's worrying struggling business owners. They're faced with the choice of surviving on little income or collecting unemployment, which would mean shutting down.
Dave Woods of Lindenhurst wrote in to CBS 2: "I am a small business owner of a corporation providing marketing assistance to large companies. Work has slowed to nothing, but unlike my employees, I cannot collect unemployment because I am an officer of the corporation despite paying into the system with each paycheck for 20 years. I was told I would need to fold my company in order to apply which would effectively destroy the goodwill I have developed over the past 2 decades when my clients find a disconnected phone!"
We decided to tell his story.
While Woods makes a living investigating trademarks, these days he's investigating where his next paycheck will come from.
"Things are tight. I have to pay overhead, I have bills to pay," he tells CBS 2.
But his phone hasn't rung since last week. The office is empty, his employees of ten years laid off because his company client list isn't spending like it used to. And he can't turn to the state for help.
"I was told because I'm an officer of the corporation, I cannot collect unemployment. In effect I would have to fold my business and close it," he said.
That's the choice for the father of two: continue with little income or close a business to receive unemployment.
"In effect that would obliterate any chance I would have of working again for my clients. How would they get in touch with me? I'd fold my business, I'd disconnect the numbers and then what am I going to do?" he says.
The Department of Labor admits this may not seem fair at first blush, but adds benefits weren't designed for those who have a potential source of income.
Business Attorney Richard Weltman says the issue isn't common, but says the Department of Labor is focusing on company control.
"Their argument may be as long as the company remains viable and he has a potential salary and he hasn't actually shut it down, the possibility is that he would continue to draw a paycheck," says Weltman.
Instead, Woods is borrowing from life insurance polices and scanning the want ads in search of a part-time job.
"There has to be a way to collect unemployment of which I've been paying in until things turn around or I can get on my feet again without having to shut down a 25 year history," says Woods.
A history that could use another phone call.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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