510 Employed

Policy

A person must be employed to qualify for Freedom to Work (FTW).

The customer must:

·        Be earning wages; and

·        Pay Social Security and Medicare taxes.

With the exception of Medically Improved customers, FTW customers do not have to work a minimum number of hours during the month or earn a minimum rate of pay. Medically Improved customers must be earning an amount equal to 40 hours per month at the federal minimum wage. To determine if the customer’s earnings meet this requirement use:

·        The customer’s gross earnings; or

·        The gross receipts less business expenses for a self-employed customer.

Employed usually means working and receiving earned income during the month. However, the customer does not need to receive earned income during the month to meet this requirement. For example, a customer who works during the month, but will not be paid until the following month, meets the employment requirement.

When the customer stops working, FTW eligibility ends the month after the customer stops working, even when he or she continues to get paychecks in following months.

Exceptions:

·        A school employee who does not work during the summer months meets the work requirement during the summer when he or she has a signed contract to return to work in the fall.

·        A person who is not currently working because of vacation or medical leave, but remains an employee is considered to meet the work requirement.

Definitions

Proof

Employment:

Proof of employment includes:

·        Proof of employment is collected from the Federal and State Data Services Hubs when available. When proof is not available electronically, other sources of proof include: Pay stubs;

·        Letter from employer;

·        A Request for Verification of Employment (DE-206) completed by the employer;

·        Phone call with the employer;

·        If self employed, a copy of the most current tax return; or

·        If self employment just started, copies of current business records such as a business ledger or business account statements.

Payment of Social Security and Medicare taxes:

Proof a person is paying taxes includes:

·        Electronic Verification from Federal and State Data Services Hubs;

·        Pay stubs showing tax withholding;

·        A Request for Verification of Employment (DE-206) with the question about tax withholding completed by the employer;

·        Letter from employer or a phone call with the employer verifying that Social Security and Medicare taxes are withheld from wages or paid by the employer; or

·        If self-employed, the previous year’s tax return showing payment of Medicare and Social Security taxes or copies of forms and cancelled checks used to make quarterly payments to the IRS.

Employment status during an absence:

Proof that a person remains employed between contracts or while on leave includes:

·        Paystubs showing the customer is currently receiving leave pay;

·        Written statement from the employer that the customer remains an employee during the absence;

·        Employment contract for the upcoming school year;

·        Collateral contact with the employer to confirm the customer is still considered an employee while on leave or has accepted a new contract for the upcoming year;

·        Other documents showing the customer remains employed during the absence.

Legal Authority