If you are self-employed or do freelance work, you may still be able to get unemployment help. Especially if you had a decrease in business due to COVID-19. Last year, the COVID-19 virus swept across the country. It shocked the U.S. economy and left in its wake a large number of unemployed and partially unemployed workers.

But unlike past economic shocks (i.e., the Great Recession from 2007 to 2009), today, there are a larger number of workers who are self-employed or freelancing as independent contractors. According to one report by ADP Research Institute, there are at least 6 million more “gig” workers than there were a decade ago.[1] What’s more, that report did not even include all types of gig workers, such as Uber drivers!

That’s a problem.

Because independent contractors and the self-employed are generally not covered under state unemployment insurance programs.

Be aware that the states’ unemployment insurance programs were lacking for today’s economy, Congress enacted the CARES Act last spring, which established the Pandemic Unemployment Assistance (PUA) program. The PUA program’s aim is to extend unemployment benefits to workers that would otherwise not qualify for regular unemployment benefits, including gig workers that were impacted by the pandemic.[2]

The scenarios in which a gig worker may qualify for PUA are too many to mention here, but the following discusses the main must-have points you need to qualify.

PUA Eligibility Criteria

First, if you are eligible to receive regular unemployment benefits, then you are not eligible for PUA. As a practical matter, if you apply for PUA in Arkansas, the Division of Workforce Services (DWS) will check and see if any employers have reported paying wages to you during your “benefit year.” If the system shows that you have reported wages, then you may be instructed to apply for regular unemployment benefits first.[3]

Important Note

If you have already applied for PUA and have received a denial letter, be sure to file an appeal in order to preserve your rights to the benefit. Some of our clients have reported that they have been denied PUA, and when they attempted to find out why, they were instructed by agents of the DWS to not appeal the PUA denial and that they had to apply for regular unemployment first. It is recommended that if you believe you are eligible for PUA, then you should follow the instructions that are on the PUA denial letter and file an appeal.

Second, and speaking more general, under the PUA program, you must be “able and available to work” unless COVID-19 is in some way preventing you from working.[4] The PUA program lists a variety of situations where COVID-19 caused a worker to be unable to work. If you are unable to work and you think you may meet the criteria outlined below, then you may be eligible for PUA:

• You’ve been diagnosed with COVID-19 or are experiencing symptoms of COVID-19 and seeking a medical diagnosis;

• A member of your household has been diagnosed with COVID-19;

• You are providing care for a family member or a member of your household who has been diagnosed with COVID-19;

• A child or other person in the household for which you have primary caregiving responsibility is unable to attend school or another facility that is closed as a direct result of the COVID-19 public health emergency and such school or facility care is required for you to work;

• You are unable to reach the place of employment because of a quarantine imposed as a direct result of the COVID-19 public health emergency;

• You are unable to reach the place of employment because you have been advised by a health care provider to self-quarantine due to concerns related to COVID-19;

• You were scheduled to begin employment and do not have a job or are unable to reach the job as a direct result of the COVID-19 public health emergency;

• You have become the breadwinner or major support for a household because the head of the household has died as a direct result of COVID-19;

• You have to quit your job as a direct result of COVID-19;

• Your place of employment is closed as a direct result of the COVID-19 public health emergency; or

• You meet any additional criteria established by the Secretary for unemployment assistance under this section . . . .[1]

The last bullet-point requirement is important for gig workers and in finding out if they meet the needed pieces to get accepted. The Secretary of Labor has made clear through the giving out of guidance letters that an “independent contractor who experiences a significant diminution (is working less) of work as a result of COVID-19” is eligible for PUA.[6]

The above guidance would cover, for example, drivers for ride-sharing services such as Lyft or Uber, who have experienced a significant decrease in business as a result of COVID-19. But it would also cover many other freelancers and gig workers that suffer a loss of money/income as a result of the pandemic.

 Currently, there does not appear to be any additional guidance on what makes up “significant diminution.” Thus, claimants applying for or appealing a PUA denial should try to obtain written, hard-copy evidence that shows a loss of income in the business. For example, if you are a driver for a ride-sharing service, obtain statements from the ride-sharing company that illustrate earnings both before and after the announcement of the pandemic.[7]

The PUA Program in 2021                                             

At the close of 2020, Congress extended the PUA program through the enactment of the Continued Assistance Act (“Act”). The Act continued the PUA program to March 14, 2021. Under the Act, any application that is filed after December 27, 2020, may not be backdated any earlier than December 1, 2020.[8] Persons covered under PUA will also be eligible to receive an additional $300 in benefits for each week of eligibility.

Under President Biden’s stimulus plan, PUA will likely be extended beyond the March 14, 2021 expiration date.[9]

References:

[1] The gig economy has ballooned by 6 million people since 2010. Financial worries may follow, CNBC, available at https://www.cnbc.com/2020/02/04/gig-economy-grows-15percent-over-past-decade-adp-report.html.

[2] Letter from Senator Mark Warner to Secretary of Labor (April 3, 2020) (“The CARES Act directs states to stand up a new program, the Pandemic Unemployment Assistance (PUA) Program, to disburse benefits to workers who would normally not be eligible for unemployment assistance, such as gig workers or freelancers.”), available at https://www.warner.senate.gov/public/_cache/files/0/0/00279aa0-43d4-457e-b615-c5f1543058f4/772A92BB290D37B970D8C51BEF88474C.2020-04-03-coronavirus-letter-to-dol---issue-guidance.docx.pdf

[3] U.S. DOL Program Letter 16-20, Change 1, I-7 (mandating states to require PUA applicants to apply for regular UI first where eligibility for regular UI is questionable), available at https://wdr.doleta.gov/directives/attach/UIPL/UIPL_16-20_Change_1.pdf.

[4] 15 U.S.C. § 9021(a)(3)(A)(ii)(I).

[5] § 9021(a)(3)(A)(ii)(II)(aa)-(kk).

[6] U.S. DOL Program Letter 16-20, Change 1, I-11, available at https://wdr.doleta.gov/directives/attach/UIPL/UIPL_16-20_Change_1.pdf.

[7] The World Health Organization declared a pandemic on March 11, 2020, so that may be a good date to use as a reference point.

[8] Consolidated Appropriations Act, 2021, specifically Division N, Title II, Subtitle A, the Continued Assistance for Unemployed Workers Act of 2020.

[9] Nearly 11 million Americans will lose unemployment benefits in April without more relief, CNBC, https://www.cnbc.com/2021/02/11/unemployment-benefits-to-end-for-millions-in-april-without-more-relief-.html.

AUTHOR: TREVOR TOWNSEND, STAFF ATTORNEY FOR THE CENTER FOR ARKANSAS LEGAL SERVICES