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As defined by federal and state laws, employment is the hiring of workers by others for wages. Self-employed individuals are therefore excluded from coverage. Incorporated self-employed persons, however, are covered because corporations are recognized as separate legal entities, thereby allowing individuals to be employees of their own corporations.
Some coverage exclusions result from how an employer is defined. The Federal Unemployment Tax Act defines an employer generally as having a payroll of $1,500 in at least one quarter of the calendar year or preceding year or has at least one worker working for part of 20 different weeks in the calendar year or preceding year.
Thirty-three states, including Idaho, have adopted this definition. Ten states have the broadest possible coverage by defining an employer as one who has any covered service in their employment. The other states have requirements of fewer than 20 weeks or payrolls other than $1,500 in a calendar quarter.
The definition of employer differs for agriculture, domestic households and nonprofit organizations.
In agriculture, the federal law designates covered employers as having 10 or more workers in 20 weeks or a payroll of $20,000 or more in any quarter. Farm owners or operators are excluded from coverage in all states.
In domestic service federal law designates covered employers as private households, social clubs, and college fraternities and sororities that pay wages of $1,000 or more in a quarter.
Federal and state laws also specify certain categories of employment as not covered. States can choose to extend coverage to a federally excluded category. Common exclusions among the states are:
¨ Minor children employed by their parents or parents employed by their children.
¨ Railroad workers, who are covered by a special federal unemployment insurance program administered by the Railroad Retirement Board.
¨ U.S. Armed Forces military personnel, who are covered under a separate federal program, Unemployment Compensation for Ex-Servicemen also known as UCX.
¨ State and local government elected officials, members of the judiciary, state national and air National Guard members, temporary emergency employees and policy and advisory officials.
¨ College and university students employed by the school where they are enrolled such as work-study students.
¨ Student nurses and medical interns employed by hospitals as part of their professional training program.
¨ Insurance and real estate agents paid only by commission.
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