Here’s How Gig Workers, Freelancers Can Get Unemployment Amid Coronavirus

This quadrant of images shows various gig jobs from being a freelancer, to a grocery delivery person, a dog walker and a ride share driver.
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In most states, the calvary hasn’t yet arrived for independent contractors who are out of work due to the coronavirus.

But it’s coming.

Freelance, self-employed and gig workers are now eligible for unemployment assistance under new provisions in the $2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act. The sweeping, national benefits expansion under this new law is the first of its kind to include aid for workers in the gig economy, which has been ravaged by the fallout from the coronavirus

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The CARES Act provides emergency relief to workers who have “fallen through the cracks” of typical unemployment insurance programs, says Lawrence Mishel, a senior labor-market economist who studies the gig economy at the Economic Policy Institute, a pro-labor think tank.

“[The CARES Act] is huge because otherwise they would get no income support from the unemployment insurance system because their employers have told them they’re self employed and they’re on their own,” Mishel said in an interview with The Penny Hoarder.

How the CARES Act Helps Gig Workers

The CARES Act extends Pandemic Unemployment Assistance to those who don’t typically qualify for unemployment insurance programs. Under PUA, those who qualify will receive half of their state’s average weekly unemployment insurance payment plus a $600 weekly supplement from the federal government, for up to four months – or until July 31. The act also extends each state’s unemployment program by 13 weeks, for a maximum of 39 weeks.

Average unemployment payments and program duration vary by state.

According to the latest data available from the Department of Labor, the lowest weekly unemployment payment average is $215 in Mississippi. The highest is $550 in Massachusetts. For example, a freelancer from Mississippi who qualifies for the state’s PUA program would receive about $107 from the state and $600 from the federal government each week.

Also depending on the state, a person might receive one check that combines those totals or two separate checks.

Pro Tip

Use Career One Stop’s state-finder tool to find out the best way to file an unemployment claim in your state.

Income fluctuates week by week for many gig workers who make a living through apps like Uber and Lyft. Workers for those ride-sharing apps have been hit hard due to sweeping stay-at-home orders, business closures, major event cancellations and empty airports.

For them, $700 or more in weekly assistance could be a lifeline.

According to Mishel’s research, the average Uber driver makes less than $10 an hour when accounting for fees, vehicle expenses and other costs associated with ride-sharing. 

As he put it, the government is paying them more than their typical net earnings to stay at home and stop the spread of the disease.

Who’s Eligible for Pandemic Unemployment Assistance?

Pandemic Unemployment Assistance is a safety net for people who typically don’t qualify for unemployment insurance. 

Common reasons people can’t get benefits are inconsistent work history, earnings that don’t meet state minimums and working for employers that don’t pay payroll taxes. That third factor is what classifies most gig workers as independent contractors, not employees, and disqualifies them from regular unemployment payments.

But PUA does cover them.

Applicants for PUA will have to self-certify that they are partially or fully unemployed or can’t work due to one or more of these coronavirus-related circumstances:

  • They have been diagnosed with COVID-19 or have symptoms and are seeking diagnosis.
  • A member of their household has COVID-19.
  • They are taking care of someone with COVID-19.
  • They are caring for a child or other household member who can’t attend school or work because it is closed due to COVID-19.
  • They are quarantined by order of a doctor or health official.
  • They were scheduled to start employment and don’t have a job or can’t reach their workplace as a result of the pandemic.
  • They have become the breadwinner for a household because the head of household died due to COVID-19.
  • They had to quit their job as a direct result of COVID-19.
  • Their workplace is closed as a direct result of COVID-19.
  • They meet other forthcoming criteria established by the Department of Labor.

Undocumented residents, workers who can continue working remotely and workers who are on paid leave aren’t eligible for PUA.

Hiccups in PUA Implementation — But Don’t Worry

Applying for assistance is proving to be difficult and confusing for many independent contractors. Online advice groups for gig workers are flooded with questions about the new program. The process varies by state, fanning the flames of confusion.

While the federal legislation provides unprecedented levels of funds to help those out of work due to the coronavirus, it relies on state unemployment offices to implement the changes. And even before the massive expansion in benefits, state offices were slammed with new unemployment claims. The Department of Labor said states received 3.3 million claims the third week of March, shattering the previous record of 695,000 weekly claims.

During the final week of March, when the CARES Act passed, claims doubled to 6.6 million, nearly ten times higher than the pre-pandemic record.

Due to social distancing measures, state unemployment offices are channeling applicants to their websites and toll-free numbers. Media reports say unemployment sites are crashing – and phone lines are busy – due to the increased traffic.

Workers will be eligible for retroactive benefits and can access benefits for a maximum of 39 weeks.

Another big roadblock: Because many states don’t have experience handling unemployment claims for this new segment of workers, they aren’t accepting new applications until the Department of Labor releases guidelines.

“IMPORTANT NOTICE: The CARES Act has been signed into law, but those benefits are not yet available until we receive official guidance from the U.S. Department of Labor,” reads the website of Colorado’s Department of Labor and Employment.

It’s not clear when the federal guidance will be released.

Some states like California and New York – home to a lionshare of gig workers – have already implemented policies that treat independent contractors for major gig apps as employees. In those states, gig workers can file for regular unemployment insurance.

On Twitter, California’s state unemployment agency welcomed independent contractors to apply for the state’s unemployment insurance program immediately.

Because states are rolling out their own individual responses to the CARES Act, the first major step for the gig workforce is to seek application info from their state’s unemployment agency. While frustrating, delays should be expected.

The upside is that the PUA funds may be applied retroactively, starting on Jan. 27, according to the National Employment Law Project.

“The PUA program will run from January 27, 2020 through December 31, 2020. Workers will be eligible for retroactive benefits and can access benefits for a maximum of 39 weeks,” the organization stated. “But eligibility will sunset on December 31, 2020,” unless the program is extended.

Translation: Don’t worry if you can’t apply or aren’t approved immediately. But don’t wait too long to apply, either.

Adam Hardy is a staff writer at The Penny Hoarder. He covers the gig economy, entrepreneurship and unique ways to make money. Read his ​latest articles here, or say hi on Twitter @hardyjournalism.