Out-of-work owner-operators are eligible for benefits!
“Unemployment For Independent Contractors”. Yep, these are strange times indeed. So, you ask, how can my Owner-Operator friends collect Federal unemployment benefits.
Allow Me To Introduce You To The Federal CARES Act – Unemployment Benefits for Independent Contractors.
The CARES program provides unemployment assistance provides expanded unemployment assistance to individuals not eligible for unemployment insurance benefits: specifically independent contractors, including the ubiquitous “Owner-Operator”. In an unprecedented change, independent contractors and those self-employed will be able to draw unemployment pay should they lose work as social distancing and shelter-at-home requirements related to the COVID-19 coronavirus outbreak erode the U.S. economy. Under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, both leased and independent Owner Operators will be entitled to “pandemic unemployment assistance” if they are able and willing to work or telework (I think this would encompass freight brokers as well) for pay, but can’t because of reasons related to the COVID-19 pandemic. You heard me right: owner-operators will be able to file for unemployment pay from the federal government.
Unemployment assistance will be available to self-employed individuals under Section 2102 of the CARES Act if the Applicants provide self-certification that they are (1) partially or fully unemployed, OR (2) unable and unavailable to work because of one of the following circumstances:
- is diagnosed with COVID-19 or experienced symptoms or is seeking a diagnosis,
- has a member of his or her household that has been diagnosed with the illness,
- is providing care to a family member with COVID-19,
- has primary caregiving responsibility to a child that is unable to attend school due to COVID-19,
- cannot reach his or her place of work because of a quarantine or advice of a health care provider to self-quarantine,
- has become a breadwinner after the head of household has died from COVID-19,
has had to quit his or her work as a result of Coronavirus, or
- has a work location that is closed as a direct result of a COVID-19 public health emergency.
This pay could be necessary for many owner-operators: Nearly 50% of Owner-Operators have experienced a substantial decrease in their work load. The exception is for those hauling food, particularly reefer loads. ICs could receive over $600 a week from the federal Pandemic Unemployment Assistance (PUA) program. In addition to the $600 a week offered through the end of July, self-employed individuals and independent contractors would also receive from the federal government 50% of what their state offers as unemployment pay. Of course, employee drivers who are eligible for state unemployment pay are not eligible for PUA program benefits.
Under the PUA program, self-employed and independent contractors are eligible if they quit their jobs because the virus outbreak, such as if they contract the COVID-19 or if they need to care for a relative who does. This further covers ICs who generally cannot go on “paid leave” from a job.
The Unemployment Assistance covers ICs who are “unemployed” and also “partially unemployed”.
Whether you are completely out of work or have experienced a substantial decline in your business, you are still eligible for PUA Program benefits. There are important exceptions: people receiving benefits under the Families First Coronavirus Response Act or state laws providing similar benefits to ICs.
For what period of time am I eligible for these benefits?
This financial assistance is available retroactively to January 27, 2020 through December 31, 2020 provided the individual’s unemployment, partial unemployment, or inability to work caused by COVID-19 continues, up to a maximum of 39 weeks including any weeks when the independent contractor received any other paid benefits under federal or state law.
The Families First Coronavirus Response Act (“FFCRA”)
The Families First Coronavirus Response Act, which covers independent contractors, also provides for paid sick and paid family leave to self-employed individuals. This program has been expanded and extended to pay sick time and family and medical leave to “eligible self-employed individuals” who “regularly [carry] on a trade or business . . . , and would be entitled to receive paid leave . . . if the individual were an employee of an employer (other than himself or herself).”
Independent contractors are eligible for up to 10 days of paid sick leave if they are unable to work because they are subject to a government quarantine or order of isolation due to COVID-19, have been advised by their doctor to self-Quarantine, or are experiencing symptoms of COVID-19 and are seeking medical attention. Such eligible independent contractors are entitled to up to $511 per day up to a maximum of $5110, or 100% of their average daily self-employment income for the taxable year, which ever is less. Further assistance is available if the independent contractor has to care for another individual in isolation or to care for a child whose school has been closed or whose care provider is unavailable due to COVID-19 up to a maximum of $2000 for 10 days paid sick leave or 67% of the average daily self-employment income for the taxable year.
Paid family leave is also available to ICs unable to work because they have to care for a family member who is under government order or under advice by their doctor to isolate, or to care for a child who school has been closed or whose Child care provider is unavailable because of COVID-19. This benefit entitles the recipient to the lesser of $200 per day or 67% of their average daily self-employment income for a maximum of 50 days.
Notably, the FFCRA goes into effect today, April 1, 2020. No foolin’.
So, you ask, how do I get this money?
Look, the government isn’t going to send unemployment fairies out to your homes with bags of money. So, let’s figure out what you need to do; but first a statement from Senator Dianne Feinstein:
“The $2 trillion coronavirus stimulus signed into law last week includes new unemployment benefits for self-employed, part-time and gig workers who in the past haven’t been eligible for such benefits. These workers were made eligible because the economic damage caused by the coronavirus isn’t discriminating between different types of workers and so neither should federal benefits.
“In California, more than 2 million workers are self-employed and 3.4 million work a part-time job. The state is also home to millions of so-called ‘gig workers,’ independent contractors who work through online platforms such as Uber and Lyft. These non-traditional workers comprise as much as one- quarter of all workers in the state.
“I encourage all Californians who have lost their jobs because of the pandemic to apply for unemployment benefits if needed. Even if you weren’t eligible in the past, you may be now.”
Well, ain’t that special.
How do I file for unemployment insurance?
Californians can apply for unemployment benefits through the California Employment Development Department. The best way to begin the process is by going online and clicking HERE. Claims can be filed online Sunday 5 a.m. to 8:30 p.m., Monday 4 a.m. to 10 p.m., Tuesday through Friday 2 a.m. to 10 p.m. and Saturday 2 am to 8 p.m.
But you say, what if I’m not eligible for traditional Unemployment Insurance?
Fear not, Noble O-O! The CARES Act temporarily expands unemployment insurance to cover individuals who are not traditionally covered, including the self-employed, gig-workers, independent contractors, and workers with irregular work histories. It also expands the list of allowable criteria for claiming unemployment compensation to include many reasons related to the COVID-19 public health emergency. Contact the unemployment office in the state where you worked to determine your eligibility.
Good – now go n’ get you some.