What you should be doing as a self-employed worker right now

Christina Omlor

As the corona-crisis sweeps the country, more and more self-employed workers are losing work simply because their industries are closing down for now. You might be worried as self-employed workers aren’t normally eligible for unemployment insurance or benefits. However, the Senate recently approved its CARES Act (Coronavirus Aid, Relief, and Economic Security Act) – which means that you can now apply for benefits if you’re self-employed. Here’s what you need to know.

What does the Covid-19 crisis mean for self-employed Americans?

A report from Freelancers Union and Upwork, from 2018, estimates that there are more than 57 million Americans freelancers. However, the corona-crisis is threatening their livelihood just as much as workers who are employed by companies. As events are being canceled, group gatherings limited and travel banned, self-employed Americans are beginning to feel the financial impact.

  • 45% of freelancers offer skilled services (like computer programming, marketing, IT, business consulting, etc.) 
  • 30% offer unskilled services (like dog walking, ridesharing and personal tasks), 26% sell goods (like on eBay or Airbnb) and 29% engage in other types of freelance work.

Now, what are your next steps? 

Calculate your financial situation

The most important thing you need to do right now is to calculate your financial situation to see how much money you have coming in (or not) and how long you can last without having to apply for benefits. If you’re living pay check to pay check then you’ll probably have to apply for benefits as soon as possible, whereas if you have sufficient savings, you could probably wait a bit longer or make use of your skills in a different industry and skip the benefits. Either way, decide when your deadline to apply is and get started on the application sooner rather than later.

Apply for unemployment benefits

Are you eligible for unemployment benefits as a self-employed worker?

Under the new Federal Coronavirus Aid, Relief, and Economic Security (CARES) Act self-employed workers and those in the gig economy can now receive payments. This is because the bill comes with a “pandemic unemployment assistance” measure that will extend insurance to all kinds of workers affected by Covid-19. 

According to the National Employment Law Project (NELP), those eligible for “pandemic unemployment assistance’ include:

  • self-employed workers
  • independent contractors
  • freelancers
  • workers seeking part-time work
  • workers who do not have a long-enough work history to qualify for state UI benefits
  • workers who have exhausted their standard state UI benefits

But, be warned while gig and self-employed workers are newly eligible for unemployment benefits, you may not qualify if you don’t have the proper work and pay documentation. So make sure to get your paperwork in order.

How much can you expect to receive?

The calculations for PUA benefits are based on the federal Disaster Unemployment Assistance program. This means the minimum weekly benefit amount payable is half (50%) of the average benefit amount in the state you apply in.


Find out more about coronavirus and work:


The Pandemic Unemployment Assistance Program

PUA varies according to state so you should start by visiting your state’s labor department. New Yorkers should head to labor.ny.gov, for example. If you know that you would not normally be eligible for unemployment benefits, you should start the standard unemployment insurance application process, and apply for Pandemic Unemployment Assistance.

Please note,you cannot apply for PUA until you have been determined ineligible for Unemployment Insurance (UI) benefits. You must apply for UI before you apply for PUA.

When will you get benefits from the PUA?

The Pandemic Unemployment Assistance (PUA) program runs from January 27, 2020 until December 31, 2020. If you’re eligible and don’t need the support straight away, you can also receive the benefits retroactively. Eligibility will end on December 31, unless the program is extended. You can claim the PUA benefits for a maximum of 39 weeks.

Are your eligible under the $2 trillion stimulus bill?

The recently approved $2 trillion stimulus bill is aimed at supporting individuals during the corona crisis. Most people will get $1200, some less, depending on your annual income. But does this also apply for you as a self-employed worker? Yes. As a self-employed worker you are categorized as a worker who would not have qualified for benefits in the past and are therefore eligible for the weekly benefit of $600 under the stimulus bill for up to four months until July 31.

If the IRS has your bank account from the last two years tax refund you do not have to apply seperately. The money will be transferred to your bank account. Otherwise you have to file your taxes for 2019 first. According to the IRS “People who typically do not file a tax return will need to file a simple tax return to receive an economic impact payment.”

Can you apply for other benefits under the CARES Act?

Yes, if you qualify for PUA but do not traditionally qualify for your state’s unemployment insurance, you also qualify for:

  • The Pandemic Unemployment Compensation (PUC): An additional $600 per week which you can get until July 31, 2020
  • Pandemic Emergency Unemployment Compensation (PEUC): An extra 13 weeks of coverage provided to unemployed individuals who have already received all of their state’s regular unemployment coverage (in most cases, 26 weeks).
  • The CARES Act offers self-employed people the chance to take sick leave as a tax credit. If you are self-employed but work for another employer — e.g. Lyft and Uber drivers, caterers or planners for major events like South by Southwest you can get up to two weeks of sick pay at your average pay and 12 weeks of family leave pay at two-thirds your normal rate.

Are there any other places I can get support from? 

Yes, The Freelancers Union has launched the Freelancers Relief Fund. The fund will provide up to $1,000 to freelancers who are experiencing sudden hardship as a result of the COVID-19 pandemic. Applications for funding will open on April 2, 2020. 

Start your job search in an essential industry

Looking for a full- or part-time job for the next few months, see our list of industries that are employing people like you right now, just make sure that you get to know the guidelines regarding any work you want to do, if you’ve applied for PUA or other benefits.

 

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