State Begins Accepting Unemployment Claims from Gig Workers

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State Begins Accepting Unemployment Claims from Gig Workers

Budget, Tax, & Finance Economy HR & Employment Law News | April 20, 2020
By: Brad MacDougall

The Executive Office of Labor & Workforce Development (EOLWD) announced that claimants were able to file for Pandemic Unemployment Assistance (PUA) beginning at 8:30 am today.

PUA claimants can apply here

The PUA is a program open to the following individuals:

  • Self-employed individuals, including “gig” workers, freelancers, and independent contractors
  • Those seeking part-time employment
  • Claimants that have an insufficient work history to qualify for benefits
  • And claimants that have been laid off from churches and religious institutions and are not eligible for benefits under state law.

The Coronavirus Aid, Relief, and Economic Security Act (CARES) Act was recently adopted by the federal government in response to the adverse economic impact of the COVID – 19 economic crises. As part of that legislation, the Congress made a number of changes that significantly broadened the traditional definition of eligibility for unemployment insurance by creating an entirely new class of unemployment insurance benefits recipients that now includes independent contractors and self-employed individuals, which will have a direct impact on employers. This notice is designed to inform employers about the specific changes and what rights and responsibilities employers may have in response to these changes.

Eligibility of nontraditional UI recipients (i.e. “Gig” Economy Workers). This new category of UI eligible individuals includes the self-employed, often referred to as independent contractors who file a 1099, people seeking part-time employment and people who have historically not collected UI benefits due to earning insufficient wages. Newly established access to UI benefits for this group of individuals will be retroactive to February 2, 2020 and will remain in effect until the end of the year.

What can employers do in anticipation of these claims?

Gig economy workers, UI eligibility in your company’s UI account

Given this broadening of eligible UI claimants, employers need to be extremely vigilant that any claims filed by “gig” economy workers should not have their claims charged to your company’s individual UI trust fund account. The primary concern is the potential for an adverse impact on the employer’s individual experience rating system for a claim that should not be there. Employers need to be vigilant to prevent inappropriate claims being filed against their account in advance as it is next to impossible for an employer to undo the wrongful claim that has gone through the process and been assigned to your company without a challenge.

This simple checklist is designed to help employers to determine what if any action they must take to ensure claims are not inappropriately charged to their account.

  • Determine if any gig economy workers have worked at your facility in the past year. Indicators of a gig economy worker or workers would be the issuing of IRS 1099 forms, documentation demonstrating that you have contracted with independent contractors, or the use of any other nontraditional employment relationship.
  • If any names are uncovered, maintain that information separately for easy access during an appeal process. Details should include things that demonstrate why you believe the individual is a gig economy worker and not an employee. Important information would include start date, end date, bid selecting process if applicable, nature of how funds were paid to the individual individuals (Accounts Payable payments), nature of the work performed for the company, etc.
  • Effective immediately and throughout 2020 regularly check your company’s UI account on the Quest system to determine if anyone has filed a claim for benefits that you believe is a gig economy worker rather than a regular employee of your company.
  • If you determine that a gig economy worker claim has been linked to your company file in the Quest system, immediately file an appeal with the DUA hearings department. This step is crucial as an employer only has 10 days to file an appeal.
  • Once the appeal date has been set, prepare your necessary evidence to demonstrate why this person is not an employee and is not entitled to UI benefits from your individual employer account.

What other UI law changes should employers be aware of?

Two other noteworthy unemployment insurance benefit changes were made in the law as well though neither of these requires the employer to take any unusual actions.

  • Extra weekly benefit payment – An additional $600 per week for individuals collecting benefits from regular unemployment compensation effective March 29 through the end of July. This benefit will be paid to anybody collecting unemployment on a full-time or part-time basis during those weeks.
  • 13-week UI benefit extension – provides up to 13 weeks of UI insurance benefits to individuals who have exhausted their previous unemployment benefits. Program effective as of March 29, 2020 and will last till the end of the year.

Employers with 1099 workers or any possibly other claimants above are also encourage to references AIM’s previous guidance on how to manage this new group of claimants.

If you have any questions about this aspect of the new CARES Act please contact AIM HR solutions hotline or AIM’s Government Affairs team.