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Gig Workers Would Get Jobless Benefits Under Virus Bill (1)

March 25, 2020, 8:26 PMUpdated: March 25, 2020, 10:05 PM

A $2 trillion coronavirus stimulus package set to move in Congress would give gig-economy workers temporary jobless benefits and expand similar assistance for others impacted by the pandemic.

The legislation would create a temporary “pandemic unemployment assistance” program for independent contractors and others not usually eligible for unemployment insurance, according to a summary released Wednesday by the Senate Finance Committee. The program is set to last until Dec. 31. It would also add $600 to weekly unemployment insurance benefits for employees and extend those benefits from three to four months.

The proposal on unemployment provisions is the result of an agreement still being finalized between the White House and party leaders on Capitol Hill. Both chambers are hoping to vote on the bill and to get it signed by President Donald Trump this week. Criticism over the unemployment insurance provisions by Senate Republicans may further delay this progress, however.

The new benefits for gig workers and other independent contractors would be available to those “who are unable to work as a direct result of the coronavirus public health emergency,” according to the summary.

“That’s certainly a new development and recognition that we have more of those folks in our economy and they’ll be impacted in the same way as other workers,” said David Barron, labor and employment attorney with Cozen O’Connor. “It’s a way of recognizing the reality of what’s going on.”

The Covid-19 pandemic has shined a light on Uber Technologies Inc. and Lyft Inc. drivers, Postmates food deliverers, Instacart grocery shoppers and other gig workers who connect to customers through online platforms. Those workers are largely treated as independent contractors, and typically aren’t covered by unemployment insurance.

The legislation comes as some states, led by California, are trying to force gig companies to make those workers employees. Class action lawsuits challenging gig workers’ classifications are also pending in several courts.

The bill introduces minor amendments to the paid sick leave provisions in the previously approved coronvairus response package, H.R. 6201, and maintains exclusions for employers with more than 500 employees.

Unemployment Benefits Questions

The additional $600 weekly payments for UI benefits was a serious concern of Republican Sens. Ben Sasse (Neb.), Tim Scott (S.C.), and Lindsey Graham (S.C.) earlier Wednesday. The senators said low-wage workers would receive more than their normal pay, giving them an incentive to remain unemployed. They called for that provision of the bill to be removed before it was voted on.

The extended unemployment benefits come as workers are estimated to have filed millions of new jobless benefits claims last week. Businesses continue to shed workers as local governments impose strict social-distancing measures and close businesses deemed “non-essential.”

It covers workers who have Covid-19 symptoms and are awaiting diagnosis, those who are diagnosed with the virus, those who have a household member diagnosed with the illness, who have caregiving needs associated with the sickness, and who have to care for a child whose school is closed.

Senate Minority Leader Chuck Schumer (D-N.Y.) said the compromise legislation was “far from perfect.”

“There are many issues that could have and would have been resolved differently if Democrats were in the majority,” Senate Minority Leader Chuck Schumer (D-N.Y.), said in a letter announcing the bill Wednesday. “We will continue to push our Republican colleagues in the Senate and the Trump administration to fix what needs fixing, and hold them accountable for how the programs and taxpayer money is handled.”

Sick Leave Carveouts

Democrats appear to have failed to improve on paid sick leave provisions they sought to include after the second virus response package (H.R. 6201) passed.

While the pandemic unemployment assistance isn’t as direct economic help as paid sick leave can be, the broader jobless benefits could provide a stopgap for workers left out by the paid sick leave protections of the bill, said Vicki Shabo, a senior fellow on paid leave policy with New America. Those workers include employees of major chain big box and grocery stores as well as some small businesses.

An amendment in the latest version of the compromise bill would give the Office of Management and Budget the authority to exclude certain executive branch employees from emergency paid sick leave coverage. It also includes a new provision that workers who were laid off after March 1 can still be eligible for paid leave once they’re reinstated by their employer—both pieces proposed in the Senate GOP bill introduced March 20.

The bill also includes an amendment stating an employer can pay more than $511 per day for each employee taking leave due to caregiving or personal illness tied to Covid-19 or more than $200 per day for each employee taking leave to care for a family member or due to school or childcare closures tied to the virus. Shabo said this could mean workers would be limited to one type of paid sick leave—either for personal paid sick days or for family care and school closures, but not both.

(Updated to include paid sick leave details in 14th paragraph.)

To contact the reporter on this story: Jaclyn Diaz in Washington at jdiaz@bloomberglaw.com

To contact the editors responsible for this story: Bernie Kohn at bkohn@bloomberglaw.com; Chris Opfer at copfer@bloomberglaw.com

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