The federal stimulus bill passed by Congress and signed into law last week extends unemployment insurance to self-employed workers, independent contractors, freelancers and so-called “gig” workers.
But the federal government and states still have to figure out how to make it work.
And that means Nevada is going to have to revise its unemployment program, too.
There are tens of thousands of those workers in Nevada, people who, yes, have been driving conventioneers to strip clubs for Uber and Lyft, but also people setting up displays at trade shows, or styling hair, or doing freelance graphic design, or cleaning houses, or doing day labor, or … all manner of pick-up work that pops up in a special event-heavy tourist town, and in a U.S. workplace that in recent years has moved closer to precarious employment and further away from traditional full-time jobs.
The new federal law will give those workers, or at least those who qualify, $600 a week. That would be on top of whatever the state ends up giving them.
And it’s still not clear how it’s all going to shake out.
First, individual states must sign an agreement with the U.S. Department of Labor, and then states must wait for a letter from the Labor Department laying out the guidelines for administering the expanded benefits.
Nevada fulfilled the first step over the weekend, and state officials are hoping for the Labor Department guidance letter “in the coming days,” according to a statement from the Nevada Department of Employment, Training and Rehabilitation (DETR) Employment Security Division, which administers the state’s uninsurance claims and benefits program.
“We are one step closer to being able to address the needs of independent contractors and others who historically have not been covered under our traditional unemployment system,” said DETR Director Tiffany Tyler-Garner. “The signed agreement was the first essential step in getting the required funding and administering the programs.”
To recap: Under Nevada’s unemployment insurance system as it is now, self-employed workers, independent contractors, freelancers and other workers whose employers were not paying into the unemployment insurance system on their behalf are not covered by unemployment insurance.
The federal legislation signed last week extends benefits to those workers, but the state also has to revise its own regulations to cover those workers too.
The federal part of the program is called the Pandemic Unemployment Assistance program. That’s the part that provides the new $600 a week supplement.
The state’s part is it’s unemployment insurance program, which pays benefits based on prior earnings and which can range from as little as $16 a week up to a maximum of $469 a week.
The $600 from the feds would be on top of that.
Although the workers will have to wait to be awarded benefits, the law provides that they will be eligible for payments for work missed after the week of Jan. 27, which is to say retroactively — so long as they were unemployed for a reason related to COVID-19.
It’s not as if states have to totally reinvent the wheel. Disaster unemployment benefits have been extended to cover traditionally ineligible workers in the past, notably after hurricanes and other natural disasters, said Andrew Stettner, a senior fellow with the Century Foundation.
One caveat: For self-employed workers and others who haven’t had bosses paying into a state unemployment insurance program, state benefits “can be challenging for workers to get,” Stettner said.
Regular state unemployment benefits are based on income. For regular employees whose employers have been paying into unemployment insurance, that income record is already on the books. But gig workers, freelancers, the self-employed and others who did not have employers paying into the system will have to provide evidence of income, typically through tax returns, Stettner said.
Once they do, under the Pandemic Uninsurance Assistance program, the minimum for those workers can be no less than half the average benefit. The average benefit in Nevada in recent months was reportedly $360.
Stettner said it may actually be best if, as states coordinate and implement the expanded benefits, they pay the minimum at first, so as to get money out the door to people who need all the help they can get now — and not just the state unemployment insurance benefit, however big or little it is, but the $600 the federal government is paying.
You don’t get the $600, you see, unless you’re qualified for benefits in your state plan.
Stettner said states can adjust payments later to retroactively make workers whole, benefits-wise, as the earnings of individuals are verified.
But the first priority for states as the process unfolds, Stettner said, is making sure they are getting benefits out as quickly as they can.
Nevada and other states, not the federal government, will have authority to adjudicate which of the self-employed, gig and other workers will be eligible.
But not yet.
“Please note that these programs are not yet available,” reads the DETR statement issued Wednesday. “Self-employed and (IRS form) 1099 workers are advised to monitor updated information” at DETR’s COVID-19 claimant page.
Sen. Catherine Cortez Masto has also been in touch with the Department of Labor in aim of “getting that guidance and funding to the states immediately,” said a spokesperson in her office.
Meanwhile, Nevadans should continue applying through DETR.
Online, of course.