Category: Employment Law

COVID-19 has caused a financial crisis for many Americans. Some employees continued to work as essential workers or work from home during the shutdown. Many people were simply at home without a paycheck.

Unemployment claims increased almost immediately. Workers needed to replace the income they lost because of the coronavirus shutdown. The CARES Act gave extra unemployment benefits for millions for workers. For the first time, workers from non-traditional sectors who were not eligible for unemployment benefits could receive benefits.

The CARES Act included workers for unemployment benefits such as:

  • Independent contractors
  • Freelancers
  • Gig workers
  • Part-time employees
  • Self-employed individuals

California was slow in rolling out the unemployment benefits for these workers. Traditional workers applied for and received unemployment benefits under the CARES Act. Independent contractors and other gig workers had to wait until April 28 to apply for unemployment compensation.

The Pandemic Unemployment Assistance (PUA) Program is Now Available in California

The California Employment Development Department (EDD) said that individuals could apply for unemployment benefits through the Pandemic Unemployment Assistance (PUA) program beginning on April 28.

The PUA program offers unemployment compensation to individuals who may not have been eligible for unemployment before COVID-19. The CARES Act specifically made these benefits available to independent contracts who might not otherwise be eligible for unemployment benefits under California’s unemployment compensation system.

According to the PUA program, independent contractors who have not been able to work because of the coronavirus are eligible for unemployment benefits for up to 39 weeks beginning February 2, 2020, through December 26, 2020.

The benefits are payable in phases:

  • Phase I – $167 per week from February 2, 2020, through March 28, 2020, if unemployed because of a COVID-19 related reason.
  • Phase II – $767 per week from March 29, 2020, through July 25, 2020, if unemployed because of a COVID-19 related reason.
  • Phase III – $167 per week from July 26, 2020, through December 26, 2020, if unemployed because of a COVID-19 related reason.

The maximum term for unemployment benefits from February 2, 2020, through December 26, 2020, is 39 weeks. That includes the 13-week extension in unemployment benefits through the CARES Act. The $767 per week benefit also includes the $600 in additional funds through the CARES Act.

Benefits can be backdated to weeks beginning on February 2, 2020, or after. The date that benefits begin depends on the date that the person could not work because of COVID-19.

How do I File a Claim for Unemployment Benefits if I am an Independent Contractor?

The easiest way to file a claim for unemployment benefits under the PUA program is online. The UI Online system is the fastest and most convenient way to file for benefits. Independent contractors can do many things through the online system such as:

  • Open a claim;
  • Provide required information;
  • Check the status of a claim; and,
  • Ask questions about unemployment benefits.

The state’s online system experienced some technical difficulty when the PUA become effective. Some people complained about problems using the online system. Officials are making all efforts to ensure the system operates correctly to get benefits to people as soon as possible.

Independent contractors may also apply for unemployment insurance benefits by phone, fax, or mail. It may take longer to receive approval and benefits if a contractor files an unemployment application by phone, fax, or mail.

The EDD created a FAQ page for questions related to unemployment benefits for independent contractors and other gig workers. The FAQs page answers questions about:

  • Eligibility for benefits;
  • How to apply for benefits;
  • Required information and documents;
  • Approved COVID-19 reasons for being out of work;
  • Benefits payable under the PUA program; and, many other questions and concerns.

What Happens if You are Misclassified as an Independent Contractor?

Some employers classify an employee incorrectly as an independent contractor to reduce payroll costs. This practice can cause severe financial hardship for employees who need unemployment insurance benefits.

Employees misclassified as independent contractors may not receive unemployment benefits under regular unemployment insurance. Because they are not independent contractors, they may not receive benefits under the PUA program either.

For many workers, being misclassified as an independent contractor is a serious matter. An employee may be cheated out of health insurance, severance pay, and other benefits they should receive as an employee.

The practice can cause severe financial and tax problems for a worker. However, employers continue this practice to save money and reduce payroll costs.

If you believe your employer has misclassified your employment status, you may have several options. Discuss your options with an attorney.