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Uber, Lyft Drivers Eligible for Jobless Aid Under New Law (1)

April 6, 2020, 2:19 PMUpdated: April 6, 2020, 7:52 PM

Drivers for ride-sharing services like Uber and Lyft can qualify for emergency unemployment insurance if the Covid-19 pandemic forces them off the road, the Labor Department said.

The DOL issued guidance Sunday night to establish a new category of eligible claimants for Pandemic Unemployment Assistance, a program created under the $2 trillion coronavirus-relief law to extend benefits to various groups of workers who otherwise would be excluded from jobless aid. The guidance addressed a key area of confusion in recent weeks by specifying that independent contractors, such as workers for ride-sharing companies and other gig-economy platforms, can be reimbursed for lost wages if the public health emergency forces them to suspend operations.

The guidance also includes new operating instructions for states to administer Pandemic Unemployment Assistance, which lawmakers intended to plug gaps in state unemployment insurance programs. States, advocates for workers, and businesses in recent days had urged the department to release guidance quickly to get the critical expansion of unemployment insurance off the ground.

DOL’s move is likely to be welcomed by gig-economy workers and the online platforms for which they work, as well as state governments, which have been flooded by millions of new unemployment claims in recent weeks. Some worker advocates, however, view the guidance as a missed opportunity to scale up the program to make a greater number of vulnerable workers eligible for coverage.

Eligibility Clarified

The department issued the guidance under a provision of the $2 trillion CARES Act (Public Law 116-136) that permitted Labor Secretary Eugene Scalia to establish “any additional criteria” for Pandemic Unemployment Assistance, which Congress intended to include self-employed workers in the gig economy.

“The Secretary has determined that ... an individual who works as an independent contractor with reportable income may also qualify for PUA benefits if he or she is unemployed, partially employed, or unable or unavailable to work because the COVID-19 public health emergency has severely limited his or her ability to continue performing his or her customary work activities, and has thereby forced the individual to suspend such activities,” the agency said in the guidance.

The guidance clarified that drivers for ride-sharing companies “may still qualify for PUA benefits if he or she has been forced to suspend operations as a direct result of the COVID-19 public health emergency, such as if an emergency state or municipal order restricting movement makes continued operations unsustainable.”

However, the guidance didn’t address other groups of workers outside of the gig economy who are now struggling to make ends meet.

“The new DOL implementation guidance fails to adequately support public health or provide millions of jobless workers the relief they deserve,” said Indivar Dutta-Gupta, co-executive director of the Georgetown Center on Poverty and Inequality. “The rule fails to reflect the expansive flexibility offered to the Labor Secretary or the breadth of human suffering ongoing, insisting on onerous paperwork requirements and excluding millions of deserving workers.”

Some May Need to File Twice

Worker-rights groups plan to launch a public campaign to pressure Scalia to open Pandemic Unemployment Assistance to more categories of workers, said Judy Conti, government affairs director at the National Employment Law Project.

“We believe that DOL has read the CARES Act provisions regarding PUA too narrowly and has created administrative and legal hurdles that will prevent precisely the types of workers that Congress clearly intended to cover from receiving much needed income support during this crisis period,” Conti said via email.

Pandemic Unemployment Assistance provides up to 39 weeks of benefits. Also eligible for coverage are people who quit their job as a direct result of Covid-19; who became their household’s primary breadwinner due to a death caused by the virus; or who were scheduled to start a new job but had the offer rescinded because of Covid-19, among other qualifying reasons.

The department also mandated that states aren’t allowed to pay benefits to Pandemic Unemployment Assistance recipients until they’ve verified that the claimants aren’t eligible for regular unemployment insurance. That could create situations in which people will need to file for traditional unemployment compensation and be rejected before they can re-file for Pandemic Unemployment Assistance.

“If the individual is not eligible for regular UI because there are insufficient covered wages or the individual has an active UI claim” that’s been disqualified, then the state wouldn’t require the applicant to file twice, DOL said in the guidance. But if that person’s eligibility for regular unemployment insurance is “questionable,” then the state needs to require the individual to first file for regular unemployment benefits before being considered for Pandemic Unemployment Assistance.

(Updated with additional reporting)

To contact the reporter on this story: Ben Penn in Washington at bpenn@bloomberglaw.com

To contact the editors responsible for this story: John Lauinger at jlauinger@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com

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