Self-employed workers and contractors are typically not eligible for unemployment benefits. But like with everything else, during the COVID-19 pandemic, things are different.
Largely because of COVID-19, Minnesota’s unemployment system has experienced a massive uptick in applications: Since March 16, the state has processed 439,704 of them. Due to recent Federal legislation, those receiving unemployment benefits should also already be receiving an additional $600 per week above what they were already entitled to. That’s thanks to the $2.2 trillion CARES Act, which also established the $1,200 stimulus checks and billions in small business loans.
The CARES Act also contains a large change to who is eligible for unemployment during the pandemic: For the first time, contract workers are also eligible for unemployment through the bill’s unemployment framework, Pandemic Unemployment Assistance (PUA).
The bill gives some discretion to states to determine who is covered, but essentially, any individual who has exhausted all rights to regular unemployment and is self-employed should qualify. This includes those with only part-time employment. Independent contractors (like freelance graphic designers or self-employed plumbers) and gig economy workers (like ride share drivers) should qualify. Business owners for whom the business is their main source of income may qualify as well.
Here’s what you need to know about these new benefits.
I’m a contract worker impacted by coronavirus. When can I apply for unemployment?
Now. The Minnesota Department of Employment and Economic Development (DEED) administers Minnesota’s unemployment benefits, including benefits through the Pandemic Unemployment Assistance program. They advise you apply now, although the program to distribute benefits to self-employed people is not yet ready, so your information will be in the system for faster processing once the program is ready to make payments.
The PUA will be in effect until Dec. 31, 2020.
How do I know if I am eligible?
DEED will determine this, but eligibility is basically determined by whether or not your employment was impacted by COVID-19. For example, if you have quit your job or lose your job as a result of COVID-19 you should qualify. Instances in which a member of your household has been diagnosed with COVID-19 or you have been diagnosed with COVID-19 or are experiencing symptoms should qualify. And if you cannot work because you are now the primary caregiver for a child who is unable to attend school, you should also qualify.
How can I apply?
You can apply through the Minnesota Unemployment Insurance program. But DEED asks that you apply in a specific way. There are specific questions about your status as an independent contractor or with self-employment. They’ve built out a guide specifically for contract workers here.
When will benefits for contract workers be evaluated and start to be distributed?
DEED says that they expect the program to be operational before the end of April. Earlier this month, DEED said that they were waiting on guidelines from the Federal Department of Labor in order to build out the program and have now received them. Now, they are building out the program and told MinnPost that this “requires updated processes and programming to implement it.”
How much money will I receive?
Benefits are still being determined by DEED. But the formula to determine benefits should be available by the end of April, when the program is completed.
Will I still receive an additional $600 check if I apply for unemployment as a contractor?
Yes. Once you are approved for unemployment, you should also receive a weekly $600 check. This money is through a different Federal program: Federal Pandemic Unemployment Compensation (FPUC). This benefit expires in July of 2020.