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Independent Contractors In California May Have Limited Options To Apply For Unemployment Due To Coronavirus

  •  Chris Nichols 
Thursday, March 19, 2020 | Sacramento, CA
CDC via AP

This undated photo provided by U.S. Centers for Disease Control and Prevention shows CDC's laboratory test kit for the new coronavirus.

CDC via AP

California has seen a surge in unemployment insurance claims this week as companies shut their doors to halt the spread of the coronavirus. Some workers have seen their hours reduced, others have lost their jobs altogether.

And while those classified as employees can apply for jobless benefits, the options for independent contractors or gig economy workers are more limited. 

Speaking on Wednesday, Gov. Gavin Newsom said the state typically receives about 2,000 claims per day. 

“Two, three days ago we saw about 40,000 ... then 70,000,” he said. “Yesterday, 80,000 applications. It doubled in a 48 hours period.”

Those classified as full- and part-time employees and who are affected by the coronavirus can apply for unemployment insurance through the state’s Employment Development Department [EDD]. The department set up a website to answer questions for affected workers. 

The EDD unemployment insurance program is funded by contributions made by employers on behalf of each employee on their payroll. Unemployment benefits are designed to replace a portion of one’s wages, from $40 to $450 per week.

But what options are there for the self-employed? 

California has hundreds of thousands of gig economy workers, from freelance writers to rideshare and delivery drivers, often classified as independent contractors. Lyft, for example, says it has 325,000 drivers in the state, while Uber has 200,000.

If impacted, these workers may be eligible for unemployment assistance under certain, though limited scenarios, said Loree Levy, an EDD spokesperson.

  • If a self-employed or independent contractor chose to cover themselves and paid into an unemployment insurance plan, they can apply for unemployment assistance.
  • If a previous employer contributed on that worker’s behalf over the last 12 to 18 months, they can also apply.
  • If the individual was misclassified as an independent contractor instead of an employee, they can apply. 

Levy did not know how many independent contractors might be eligible. 

“It all depends. It’s a case-by-case basis,” she said.

EDD also runs the state’s Disability Insurance and Paid Family Leave programs, both of which require paid contributions. 

There’s one more benefit independent workers could be eligible for should the federal government approve it: Disaster Unemployment Assistance. Levy said that benefit has been made available following other national disasters and “covers people who fall through the cracks.” 

Given the sudden slam of applications, Levy said EDD is hiring new workers and drawing on those who recently retired from the department to help. 

Benefits aren’t sent out overnight. It takes about three weeks to process applications, Levy said, noting the EDD debit card option is the fastest and allows people to withdraw cash or forward the money to their own account. 

Earlier this week, Newsom signed an executive order ensuring jobless benefits will apply to the first week people are affected. Normally, they would kick-in only after a week has passed. 

Additionally, the state launched a comprehensive website, covid19.ca.gov, to highlight steps people can take to stay healthy, along with resources for applying for paid sick leave and financial assistance.


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Chris Nichols

PolitiFact California Reporter

For the past dozen years, Chris Nichols has worked as a government and politics reporter at newspapers across California.  Read Full Bio 

 @christhejourno Email Chris Nichols

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