CARES Act: Unemployment Insurance Even for Part-Timers and Independent Contractors

The Coronavirus Aid, Relief, and Economic Security (CARES) Act — the $2 trillion spending law approved on March 27, 2020 in response to the COVID-19 crisis — included provisions extending unemployment insurance, including to categories of individuals usually ineligible, like independent contractors and part-time workers.

Interested IA members should consult their respective states, since unemployment benefits are managed and run at the state level.

The Pandemic Unemployment Assistance (PUA) provisions of hte CARES Act provide up to 39 weeks of benefits, starting with weeks of unemployment beginning on or after January 27, 2020 and ending on or before December 31, 2020. PUA covers individuals:

• who are self-employed;
• who are seeking part-time employment;
• who otherwise would not qualify for regular UC or EB under state or federal law or Pandemic Emergency Unemployment Compensation (PEUC);
• who have exhausted all rights to regular UC or EB under state or federal law, or PEUC.

Individuals must demonstrate that they are otherwise able to work and available for work within the meaning of applicable state law, except they are unemployed, partially unemployed, or unable or unavailable to work because of certain COVID-19-related reasons.

Individuals able to telework with pay or who are getting sick leave or other paid leave benefits do not qualify for PUA.

The U.S. Labor Department has clarified that “an individual who works as an independent contractor with reportable income may also qualify for PUA benefits if he or she is unemployed, partially employed, or unable or unavailable to work because the COVID-19 public health emergency has severely limited his or her ability to continue performing his or her customary work activities, and has thereby forced the individual to suspend such activities.”

The CARE Act’s Federal Pandemic Unemployment Compensation (FPUC) provisions provide an emergency increase in ordinary unemployment compensation benefits

The FPUC gives an additional $600 per week to individuals collecting regular unemployment payments, including a variety of related unemployment-related payment progams like Disaster Unemployment Assistance (DUA) and payments under the Self Employment Assistance (SEA) program.

FPUC is available for weeks of unemployment beginning after the date on which an individual claimant’s state enters into an agreement with the Department and ending with weeks of unemployment ending on or before July 31, 2020.

The law’s Pandemic Emergency Unemployment Compensation (PEUC) provisions give up to 13 weeks of benefits to cover weeks of unemployment beginning after the date on which a given state enters into agreement with the U.S. Labor Department and ending on or before December 31, 2020. PEUC is to cover individuals who:

• have exhausted all their eligibile access to ordinary unimployment compensation, or are ineligible, under respective state or federal laws;
• aren’t getting any payments from Canada’s Employment Insurance program; and
• are able to and available for work, and actively seeking it. (States are supposed to be flexible about defining “actively seeking work” because of the coronavirus crisis, including because of illness, quarantine, or movement restrictions.)

Finally, the CARES Act included temporary financing, agreements, and grants for Short-Time Compensation (STC, aka Shared Work or Work Share) arrangements. These provisions are designed for lay-off aversion, whereby an employer reduces the hours for a group of workers to avoid layoffs and these workers receive a partial unemployment benefit payment. States with an existing STC program may be reimbursed by the federal govenrment for 100 percent of STC benefit costs, up to a maximum of 26 weeks of STC per individual. These reimbursements are available starting with weeks of unemployment beginning on or after March 27, 2020 and ending with weeks of unemployment ending on or before December 31, 2020. The CARES Act STC program is available for weeks of unemployment beginning on or after the date on which the state enters into an agreement with the U.S. Labor Department and ending with weeks of unemployment ending on or before December 31, 2020.

Resources

• U.S. Department of Labor Unemployment Insurance Program Letter (UIPL) 16-20 
• U.S. Department of Labor Unemployment Insurance Guidance Letter (UIPL) 15-20 

Thanks to the Coalition to Promote Independent Entrepreneurs for providing a fair amount of this information.

NewsBusinessHoward Fienberg, CAE – The Insights Association

Tags

• independent contractors