Independent Contractors, Gig Workers, Freelancers All Eligible for Unemployment Assistance Under New CARES Act

The Coronavirus Aid, Relief and Economic Security (“CARES”) Act is a roughly $2 trillion stimulus package intended to provide economic stability to the United States during the COVID-19 crisis. In addition to direct payments to citizens, allocations for small and large businesses, and a variety of emergency loan offerings, the CARES Act provides an estimated $260 billion in unemployment insurance to millions of displaced American workers. This unemployment insurance also carves out benefits for individuals not ordinarily eligible for such insurance: self-employed workers.

Self-employed workers, otherwise known as independent contractors, freelancers, or gig workers, will be eligible for Pandemic Unemployment Assistance (“PUA”) if they are able to work but unable to do so because of COVID-19 related reasons. Applicants seeking PUA benefits must provide certification that they are either partially or fully unemployed or unable and unavailable to work because the applicant:

  • Has been diagnosed with COVID-19 or experiencing symptoms of COVID-19 and seeking medical diagnosis;
  • Has a household member diagnosed with COVID-19;
  • Is providing care for a family member diagnosed with COVID-19;
  • Has primary caregiving responsibility of a child unable to attend school due to COVID-19;
  • Cannot reach their place of work due to quarantine;
  • Has become the primary breadwinner after a head of household has died from COVID-19;
  • Has had to quit their work due to COVID-19; or
  • Has a closed work location due to COVID-19.

Workers are not eligible for PUA benefits if they are receiving paid sick days, paid leave, or can telework for pay.  Additionally, if such workers are receiving benefits available to independent contractors under state unemployment insurance they will not be eligible.  

The PUA program window runs from January 27, 2020, to December 31, 2020, with 39 weeks of benefits being the maximum amount allotted to workers. Eligibility for retroactive benefits will exist and will be counted towards the total 39-week allotment.

 The COVID-19 pandemic has strained all levels of the American workforce, and the CARES Act’s inclusion of self-employed individuals is an effort to include a group normally unable to receive such benefits.

Please contact your KDDK attorney or any member of the KDDK labor and employment law practice team or KDDK business law practice team for additional information and individualized guidance on this or any related topic.

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