COVID-19

Why some gig workers are getting less in unemployment benefits

David Brancaccio, Nova Safo, and Alex Schroeder May 14, 2020
Heard on: Marketplace Morning Report
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Gig workers have received unemployment benefits many would not have been entitled to before pandemic assistance began. Olivier Douliery/AFP via Getty Images
COVID-19

Why some gig workers are getting less in unemployment benefits

David Brancaccio, Nova Safo, and Alex Schroeder May 14, 2020
Gig workers have received unemployment benefits many would not have been entitled to before pandemic assistance began. Olivier Douliery/AFP via Getty Images
HTML EMBED:
COPY

State claims systems have been overwhelmed with unemployment insurance applications, causing delays. But even for those who have managed to apply, a new problem has emerged: Some are getting less money than others, simply because of how their work is classified.

Marketplace’s Nova Safo has been looking into this, and he points out that Congress has tried to shored up the unemployment system by making gig workers eligible for benefits through the Pandemic Unemployment Assistance program.

“Before that, you needed a traditional job with an employer and a W-2 to get unemployment insurance benefits,” Safo told “Marketplace Morning Report” host David Brancaccio.

The problem is, a lot of gig workers also have some W-2 income, maybe from a part-time or temporary job, in addition to their self-employment. If that’s the case, those workers are ending up in the “traditional” unemployment system, with only their W-2 earnings — which are limited — used to determine their unemployment insurance benefit amount. Their self-employment income is not used at all in that calculation.

Jennifer Cogan, a San Francisco-based tango instructor, says this has affected her.

“So if I was eligible clearly for PUA, I would qualify for $386 a week,” she said. “If I am forced onto regular UI, I qualify for $87 a week.”

That’s quite the difference. Cogan also works as an outdoor backpacking and cycling guide, work that has all but stopped since the outbreak started. She had actually just gotten a promotion in that job, work that was slated to start on March 16. San Francisco’s shelter-in-place order started March 17.

So she was only on the job for one day, but her employer paid her through the end of month amid the lockdown. That was the pay classified under W-2 earnings. It’s what’s prevented her from getting the rest of her insurance benefits.

“I haven’t done the math on that, but it’s like thousands and thousands of dollars,” Cogan said.

Cogan is currently working on an appeal. She says she’s “one of the lucky people” because her husband is still working. But she’s hoping the government can find a fix for situations like hers.

“I think it’s important that Congress recognizes that people don’t fit into two clear categories anymore, like they did perhaps in the past — either you’re a worker for another company or you’re a self-employed individual. There absolutely are people who make money from a variety of those two incomes, aka this hybrid worker,” Cogan said. “And that’s super important that they recognize that and adjust law accordingly to compensate those individuals.”

There are rumblings in Washington, conversations in Congress and among experts, over efforts to solve this issue with a legislative fix.

“The right approach would be for Congress to step in and say, ‘Look, states should look at a worker’s income regardless of the source,'” said Indi Dutta-Gupta, co-executive director of the Georgetown Law Center on Poverty & Inequality.

That would make them eligible for the maximum benefit amount.

COVID-19 Economy FAQs

What’s going on with extra COVID-19 unemployment benefits?

The latest: President Donald Trump signed an executive action directing $400 extra a week in unemployment benefits. But will that aid actually reach people? It’s still unclear. Trump directed federal agencies to send $300 dollars in weekly aid, taken from the federal disaster relief fund, and called on states to provide an additional $100. But states’ budgets are stretched thin as it is.

What’s the latest on evictions?

For millions of Americans, things are looking grim. Unemployment is high, and pandemic eviction moratoriums have expired in states across the country. And as many people already know, eviction is something that can haunt a person’s life for years. For instance, getting evicted can make it hard to rent again. And that can lead to spiraling poverty.

Which retailers are requiring that people wear masks when shopping? And how are they enforcing those rules?

Walmart, Target, Lowe’s, CVS, Home Depot, Costco — they all have policies that say shoppers are required to wear a mask. When an employee confronts a customer who refuses, the interaction can spin out of control, so many of these retailers are telling their workers to not enforce these mandates. But, just having them will actually get more people to wear masks.

You can find answers to more questions on unemployment benefits and COVID-19 here.

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