Interesting story. Don't know if I agree but they were logical in the sense of strictly adhering to the prior-written rules.
Here is what I found:
The Labor Department's state handbook states that "You are considered employed on any day when you perform any services - even an hour or less in self-employment, on a freelance basis or for someone else. It makes no difference whether this work is in covered employment or whether you get paid for that day."
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