Independent Contractors to Receive Unemployment Benefits Under New Program

On Tuesday, California Labor Secretary Julie Su announced that independent contractors and gig workers in California will be able to receive unemployed benefits.

Relief for independent contractors

The benefits will not come from normal unemployed insurance, but rather from a new program called Pandemic Unemployment Assistance (PUA). Under PUA, which was passed by the federal government earlier this month, independent contractors and gig workers would be covered and receive not only normal unemployment amounts but also the additional $600 a week from the federal government under the CARES Act. Secretary Su confirmed this for Californian benefits in her letter as well.

In addition to independent contractors, PUA will also cover those whose benefits have run out or those who didn’t work enough to get state benefits. As long as applicants have been fully or partially unemployed by the COVID-19 coronavirus pandemic they will be eligible.

“The CARES Act also created a special program for this crisis called Pandemic Unemployment Assistance, or PUA,” said Secretary Su in her Tuesday letter. “PUA provides federally funded benefits distinct from the UI program for certain individuals out of work or partially unemployed due to the COVID-19 crisis, including the self-employed, individuals who lack sufficient work history, and independent contractors. Federal guidelines on how to administer PUA came out on April 5 and include gig workers as an example of those eligible for PUA.”

“Every day since then, we have been working on making sure that we get Californians what they are entitled to under PUA, that we do it in a way that is reliable, that we clarify the options available to gig workers, and that we don’t set up applications that sit in a queue while we do not yet have the systems built to deliver the money.”

PUA to begin giving benefits by the end of April

Those wishing to apply for PUA benefits can begin applying in two weeks, with benefits being paid out within 48 hours. California, which took time to create a smooth transition for those wishing to apply, has hoped to avoid the problems of other states who have experienced delays in giving out PUA benefits.

“PUA has been causing some issues and has been delayed by a few states because of several reasons,” explained unemployment insurance adviser Karl Hibbert. “Many don’t have the extra employees to handle the increased number of claims PUA would bring. A big reason that I’ve been told are issues between giving the same amount for state UI benefits and PUA benefits. It seems so easy, simply divesting the money out, but a lot of systems weren’t built with this in mind.”

“It takes reprogramming to add such a huge new part in. That’s why it took California a bit, and that’s why other states are scrambling to get it all together. There are millions of independent contractors and gig workers out there, and there are a lot of partial payments too because of people with multiple jobs. Implementing CARES Act money has been delayed in many places because of issues in adding it in. California was expected to be delayed for weeks from including it but managed to find a solution much quicker than expected.”

“Honestly, so much of this is new that it’s a wonder things aren’t backed up even more.”

PUA, like UI, will be based on verified earnings. The CARES Act is expected to keep giving additional federal unemployment benefits until the end of July.