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‘Wait’ Becomes Operative Word for Gig Workers Seeking Aid (1)

April 10, 2020, 1:32 AMUpdated: April 10, 2020, 1:30 AM

To frustrated gig workers flooding state support lines and legal aid offices, wondering why they can’t get the unemployment assistance designated for them in coronavirus relief legislation, most states’ messages come down to some version of “wait” or “keep waiting.”

State officials nationwide are assuring independent contractors such as Uber and Lyft drivers sidelined by Covid-19 that they may be eligible for unemployment compensation, but only after computer systems are reprogrammed in accordance with the stimulus law and guidance from the Labor Department that some still find confusing.

In Arkansas, Commerce Secretary Michael Preston said his department needs to “build an entire new system.” He estimated it would take three weeks before the state can accept claims.

“This has never been done before, and our systems are not able to be compatible with the information that we’re going to have to receive,” Preston said at an April 8 media briefing. “Arkansas is not unique in this. Every state is going through the same process.”

The difficulty in getting the aid flowing highlights a convoluted federal-state unemployment system that, even in states with updated technology, won’t be ready to go live with the expanded benefits until at least the second half of April. Pending further clarity from the Labor Department on which types of gig workers are eligible, there remains a distinct possibility that states will require workers to file and get denied for unemployment insurance and then re-apply for the new system created by the CARES Act.

The Pandemic Unemployment Assistance program provides up to 39 weeks of benefits for independent contractors, including rideshare drivers who are forced off the roads due to coronavirus. Also eligible for coverage are people who quit their jobs 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primary breadwinner due to a death caused by the virus; or who were scheduled to start a new job but had the offer rescinded because of Covid-19, among other qualifying reasons.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 independent contractor jobless benefits represent a major shift from the ordinary criteria of unemployment insurance. Jobless benefits typically are only available to workers with employee status whose employers have paid into their state’s unemployment fund on the employees’ behalf.

‘Hold Tight’

In California, state Assemblywoman Lorena Gonzalez (D) urged independent contractors to “hold tight” on filing for jobless benefits while the state’s Employment Development Department figures out the process. Gonzalez was a lead sponsor of last year’s A.B. 5 legislation, which sought to reclassify many gig-economy workers as employees.

“EDD is seeking clarification from DOL on how to distribute that money,” Gonzalez said in an April 8 tweet. “You will eventually apply for PUA and get up to $600 a week once it’s in place, retroactively,” she added, referencing the extra $600 benefit for all unemployment insurance recipients that was part of the federal relief legislation.

Dave McNiff, who has been working primarily as a DoorDash delivery driver in Los Angeles for the last two years, hasn’t heard back from EDD since he filed a benefits claim on April 2.

“I crossed my fingers and hoped for the best,” he said.

A 64-year-old smoker, McNiff says he’s still working during the pandemic but has scaled back his hours because he’s concerned about being susceptible to the virus. He also said that a surge of Uber and Lyft drivers who have shifted to delivery service apps in recent weeks has made it harder to get work.

In Georgia, the state labor department is modifying its unemployment application to include new questions that will help screen who’s eligible for the self-employed and independent contractor benefits, department spokeswoman Kersha Cartwright said by email. The application should be ready April 13, but it will take the state several more weeks to process claims “including a different set of wage verifications and a different process for certification of wage benefits.”

The state, like others, has been waiting itself for clear guidance from DOL on how to handle these claims. Georgia got 47 pages of guidance on April 5, and then on April 8 “received additional requirements further complicating the application process,” Cartwright said.

Maine Labor Commissioner Laura Fortman noted that recent DOL guidance has repeatedly emphasized to states the importance of program integrity and fraud prevention. That may give states pause before launching their Pandemic Unemployment Assistance programs.

“I think we are all aware that if we are not implementing in a way that’s consistent with the federal interpretation that there are significant consequences,” Fortman said.

Ohio workers might have to wait until mid-May for the state to start processing applications online for the pandemic unemployment assistance, Lt. Gov. Jon Husted said.

Filing Twice?

DOL issued guidance Sunday informing states that they aren’t allowed to pay benefits to PUA recipients until they’ve verified that the claimants aren’t eligible for regular unemployment insurance.

States are now pressing the department for more specifics on how they can streamline the process to permit gig workers to file for PUA as their only step, and what documentation they’ll need.

Washington, which is planning to start its PUA system April 18, developed the technology upgrades to get checks delivered within seven to 10 days after workers file claims, said Suzi LeVine, commissioner of the state’s Economic Security Department.

“We fully expect that to persist,” she said. Assisting that turnaround time: Washington plans to have 450 call center workers on board by next Friday, and up to 1,000 by a week after that, LeVine added.

Although Washington was hoping to automatically transfer independent contractors’ denied claims over to the PUA system, it determined that “claimants will likely need to re-apply for PUA,” LeVine’s spokesman Nick Demerice said via email. “However, it will happen in the same system and we will try to make it as clear as possible.”

As Washington and other states update recently modernized unemployment software, advocates and attorneys are concerned about states like Arkansas that still rely on decades-old mainframe software and are working with vendors to build brand-new systems for Pandemic Unemployment Assistance. If these states don’t allow workers to directly file for PUA benefits, it would cause headaches.

“If states are building new separate systems to process Pandemic Unemployment Assistance in part to avoid more stress on the mainframe, it defeats the purpose of that entire process to then have people have to file through the mainframe first,” said Julia Simon-Mishel, supervising attorney for Philadelphia Legal Assistance’s unemployment compensation unit. “You’re still going to be putting all of that pressure and excess work on the mainframe even if you designed a separate system.”

The filing requirements are also poised to cause chaos.

“Because many people have not filed their 2019 tax returns, what is going to be required for documentation,?” said Maine Labor Commissioner Laura Fortman. She said her state has been in regular contact with DOL to address that question and more, and has yet to select a target date to accept PUA claims.

Another concern: What happens when states that pay benefits based on workers’ highest-earning quarter are forced to rely on a 1099 form as an independent contractors’ only proof of wages?

“I don’t think those states know what they’re trying to do to work around that yet,” said Michele Evermore, a UI expert at the National Employment Law Project. “Folks have been asking me and I don’t know. That’s a question for [DOL’s Employment and Training Administration], really.”

Apply and Wait

In other states, including New York, self-employed workers and independent contractors are being told they can go ahead and apply for benefits.

But the New York Labor Department’s website warns, “Due to enormous volume, there will be considerable wait time. Please be patient; everyone who is entitled will get their benefits.”

New York rideshare driver Syed Husnain Zaidi says he’s been unsuccessfully calling a state benefits hotline several times a day since March 23. The 55-year-old father of three who drives for Uber and Lyft said he was directed to call the hotline to complete his application after attempting to submit it online.

“It’s been almost three weeks. I’m sitting home,” Husnain Zaidi said. “There is no income. How long can we keep going like this? We really need help. I have to buy the groceries.”

Exactly how much time is going to vary by location, but if there’s one consistent response for frustrated gig workers nationwide, it’s state governments trying to manage expectations while showing compassion.

“This is a frustrating situation for many people who lost their job through no fault of their own,” said Massachusetts Gov. Charlie Baker (R) at an April 9 press briefing.

“The federal CARES Act funds haven’t been made available as quickly as we would like,” Baker said. “We will continue to ping our federal colleagues daily for more information about how to implement this law.”

-With reporting assistance from Jaclyn Diaz in Washington, Alex Ebert in Columbus, Ohio, Adrianne Appel in Boston, Keshia Clukey in Albany, N.Y., and Jennifer Kay in Miami

(Updated with timeframe for processing Washington claims in 20th paragraph.)

To contact the reporters on this story: Ben Penn in Washington at bpenn@bloomberglaw.com; Chris Marr in Atlanta at cmarr@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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