Filing for Unemployment when You Work for Yourself or are Part of the Gig Economy
Anyone who’s done freelance or contract work or joined the gig economy knows that there are benefits and drawbacks to self-employment. On the one hand, you’re free to take on all kinds of jobs, set your pay rate, and manage your own schedule, including taking vacations when you feel like it. On the other hand, you won’t enjoy the steady salary and benefits full-time employees receive.
Until recently, another drawback to this type of employment was the fact that self-employed workers weren’t eligible for unemployment benefits. Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, however, both part-time and self-employed workers may qualify for unemployment insurance (UI) benefits. How can you file for unemployment if you are part of the freelance or gig economy?
The first thing you need to understand is that unemployment benefits vary by state, so your first step is to check in with your state UI office. You can start here by selecting your state of residence/employment. If you work in a different state than where you live, check in first with your state of residence.
As part of the filing process, you may be asked to provide a variety of information and documents, potentially including:
• Name and SSN
• Contact information (phone number, address, etc.)
• Information about employment over the last 12-18 months, which may include employer names, gross income, and documents like a W-2 or 1099, tax returns (such as 1040), and/or pay stubs
• Account information (if you choose direct deposit)
• Identification (state ID or driver’s license)
When you have all the information and documentation you’ll need on hand, the filing process should be more expedient. That said, be prepared for the fact that you may be contacted if your state UI office requires further information to determine eligibility and approve your claim.
The Pandemic Unemployment Assistance (PUA) program is the portion of the CARES Act that provides for unemployment benefits for self-employed workers. As with more traditional forms of unemployment (for full-time workers suffering cut hours or layoffs), your payment amount will be based on past earnings, with a minimum benefit rate set at the average weekly benefit amount in your state.
If you are eligible, you could receive additional PUA benefits in the amount of $600 per week from the date you file through July 31, 2020. You may also be eligible for an additional 13 weeks of benefits after state benefits run out (the length of benefits varies by state), for a total of up to 39 weeks of benefits.
You should also know that some businesses and organization have set up relief funds specifically to help self-employed workers. As of April 2, 2020, the Freelancers Relief Fund (offered by the Freelancers Union) is offering assistance of up to $1,000 to applicants suffering from hardships related to the COVID-19 crisis.
Depending on the type of business you do, you may also be eligible for a $10,000 grant through the SBA when you request an Economic Injury Disaster Recovery Loan. Uber, Instacart, DoorDash, and other companies are also offering varying levels of support for their independent contractors or gig workers. It’s a good idea to look into all possible avenues of support available to self-employed workers.