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Can Independent Contractors Get Unemployment

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Independent Contractors In Michigan Can Apply For Unemployment Benefits Today

Woman shares experience filing for unemployment as an independent contractor

MICHIGAN – Self-employed workers in Michigan that have been affected by COVID-19 can apply for unemployment benefits.

Flipping the metaphorical switch at 8 this morning, independent contractors and gig employees struggling to find work during a statewide shelter-in-place order can now receive aid from the government. Funded by the federal Pandemic Unemployment Assistance , self-employed workers applying for aid can receive a $600 weekly stipend. The money should start coming in as early as April 20.

Ensuring Michiganders have access to state and federal benefits during this pandemic is a critical part in protecting everyones health and safety, Gov. Whitmer said in a statement. We will do everything we can to continue providing emergency financial assistance as quickly as possible to the Michigan working families who have lost income as a result of COVID-19.”

The money comes as an addition to the benefits received for by the $2 trillion CARES act passed earlier this month.

As of Monday morning, Michigan’s website where workers apply for unemployment benefits was down.

If you’d like to apply for funds, go to Michigan.gov/UIA to apply. To receive funds, eligible workers will need to show their proof of income from a W-2 or 1099 tax form.

RELATED: Gov. Whitmer announces unemployment benefit expansion, pay increased to $600 per week

Customers are also encouraged to use off-peak times from 8 p.m. to 8 a.m. to file.

Where Do I File For Unemployment Insurance

Unemployment insurance is a joint state-federal program that provides cash benefits to eligible workers. Each state administers a separate unemployment insurance program, but all states follow the same guidelines established by federal law.

Please see the map and list below to find the contact information for your state in order to apply for Unemployment Benefits.

Affordable Care Act Coverage More Affordable

Many independent contractors obtain health insurance coverage through their state health insurance exchange established under the Affordable Care Act . However, ACA coverage can be expensive. Depending on your income, you can qualify for a premium tax credit to help pay for your coverage.

However, under the normal ACA rules the premium tax credits are only available to enrollees whose family income is less than 400% of the federal poverty level. This is only $51,040 for a single person and $104,800 for a family of four. If your income exceeds the threshold by even one dollar, you get no financial help to purchase ACA coverage.

You can find a link to your state health insurance exchange at healthcare.gov.

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How Long Will It Take To Receive Unemployment Benefits For Self

Even a month after the CARES Act was signed into law, it’s unclear how long it will take for self-employed or freelance workers in most states to get their first unemployment payments.

Once unemployment insurance applications are completed, OneCareerStop, a website run by the Labor Department, says payments typically take a couple weeks. But thats under normal circumstances within the existing state systems.

Those existing systems have struggled to keep up with demand, though they are beginning to catch up. Stettner estimates that about 70% of claims filed since the middle of March have been processed now.

The Labor Department announced Thursday that 10 states have begun making Pandemic Unemployment Assistance payments. They are: Alabama, Colorado, Iowa, Kentucky, Louisiana, New York, Rhode Island, Tennessee, Texas, and Utah. A spokesperson at the Texas Workforce Commission, which runs the state’s unemployment insurance program, confirmed the state has been sending out PUA payments but said it doesnt yet have statistics on the number of self-employed workers whove received benefits.

Several other states are nearly ready to begin processing claims and issuing payments. Heres the status of applications in the largest 10 states:

Is It Better To Be A Contractor Or Employee

When

As an independent contractor, youll usually make more money than if you were an employee. Companies are willing to pay more for independent contractors because they dont have the enter into expensive, long-term commitments or pay health benefits, unemployment compensation, Social Security taxes, and Medicare taxes.

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Is A Worker An Employee Or An Independent Contractor

Wisconsin employers have an obligation under the unemployment insurance law to classify workers correctly as either “employees” or “independent contractors”. Employees are covered by the unemployment insurance law independent contractors are not covered.

If a worker is or has been “performing services for pay” for an employing unit, there is a presumption in the law that the worker is an “employee,” not an independent contractor. That presumption can only be overcome by evidence under the applicable unemployment insurance law that the worker is an independent contractor.

NOTE:The department has utilized the term “employer” in this website with the recognition that not all “employing units” are covered under the unemployment insurance law or have employee/employer relationships with their workers. Nevertheless, for ease of discussion in the context of deciding whether a worker is an independent contractor or an employee, the term “employer” is frequently used, rather than “employing unit.”

Can An Employer Also Be An Employee

Small business owners often talk about working for myself, but in some cases its literally true: You can own the company but legally be your own employee. The owner vs. employee question depends on the business structure, but also on whether youre defining yourself for the IRS or for some other government agency.

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Employee Or Independent Contractor

Sometimes an employer will classify workers as contractors instead of employees. In these cases, contract workers are responsible for paying their own payroll taxes, including federal and state income taxes and both the employer and employee portion of Social Security taxes. In most cases, contractors are responsible for providing their own Workers Compensation Insurance and are not eligible for Unemployment Insurance if their services are no longer needed.

Generally, a worker who performs services for an employer is an employee if the employer can control both what will be done and how it will be done. The key factor is that the employer has the right to control the details of how the services are performed, even if the employee has substantial freedom of action.

By contrast, anindependent contractor performs services required by an employer but is not subject to the employers control about how the services are performed.

The Virginia Unemployment Compensation Act, § 60.2-212C provides that Services performed by an individual for remuneration shall be deemed to be employment subject to this title unless the Commission determines that such individual is not an employee for purposes of the Federal Insurance Contributions Act and the Federal Unemployment Tax Act, based upon application of the 20 factors set forth in Internal Revenue Service Ruling 87-41.

Generally speaking, a worker is an employee if his or her employer:

Can I Get Unemployment If I Am An Independent Contractor

Updated!!! Can Independent Contractors Get Unemployment
  • Employment Attorney
  • Can I Get Unemployment If
  • During the COVID-19 pandemic, millions of workers have been laid off from their jobs. Many people who have lost work during the pandemic are independent contractors. While unemployment benefits are generally only available to employees, there are two possible ways you might qualify for unemployment benefits as an independent contractor. One way you might qualify for help is through the Pandemic Unemployment Assistance program. The other way you might qualify for benefits is if you were misclassified as an independent contractor. The attorneys at Swartz Swidler can help you understand whether you are eligible for benefits and assist you with your claim.

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    Pandemic Crisis Spotlights How Gig Workers And Other Misclassified Workers Are Forced To Work Without Critical Protections Like Unemployment Insurance Paid Sick Days And Paid Leave

    The onset of the COVID-19 pandemic in the United States has exposed employer practices and policy gaps that leave millions of Americas workersand their families and communitiesat risk of grave illness and financial ruin. Work should provide people with financial and physical security and ensure the same for their families and communities. In these volatile times, safeguarding the long-term health of the U.S. economy and society will require that all working people have good jobs that provide livable wages and benefits and a robust set of policies and programs that provide workers with the economic security to weather unexpected injury or illness and job loss.

    The COVID-19 pandemic has exposed the ways in which many workers have been left out of this picture. For decades, corporate interests and their political agents have deprived workers of the security that we all need, either by under-resourcing enforcement and allowing corporations to cheat workers of both their rights and their day in court through forced arbitration agreements, or by going along with efforts to rewrite the rules and carve workers out of the protections of labor standards.

    The good news is that we can fix this for the short- and long-term. States and cities can ensure that these workers are immediately eligible for the benefits their employers have denied them, by taking a few urgent steps that can protect our communities in both the immediate future and for the long term.

    How Do I Apply For Unemployment Benefits

    Unemployment insurance is a joint program between the federal and state governments. The federal government sets guidelines for how state programs can operate, and states set their own rules within those guidelines.

    If youre self-employed and seeking unemployment benefits during the pandemic, youll need to file a claim with your state unemployment office. Youll typically file in the state where you worked. But if you live in one state and work in one or more other states, your home states unemployment agency should be able to guide you on how to file.

    You can search for a states unemployment website through the U.S. Department of Labors CareerOneStop website. Depending on the state and its rules, you may be able to submit an online application, or file by phone or in person at a state unemployment office location. Check your states website to learn about its application process.

    Take note that if you previously tried to file for unemployment and were denied, it may be worth contacting the state about your claim. The Department of Labor has directed states to review claims denied after Jan. 27, 2020, to identify people who may be eligible for Pandemic Unemployment Assistance.

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    I Run A Nonprofit Organization And Am A Reimbursing Employer Under My States Unemployment Insurance Program Due To The Economic Impacts Of The Covid

    Contact your state unemployment insurance office to learn what options may be available for delaying reimbursement payments. The CARES Act allows states to provide maximum flexibility to reimbursing employers as it relates to timely payments in lieu of contributions and assessment of penalties and interest. The U.S. Department of Labor will soon be issuing guidance on how states should implement this provision.

    What Is An Offer Of Suitable Employment And How Is It Connected To Unemployment Insurance Eligibility

    Can I Get Unemployment If I Am an Independent Contractor ...

    Most state unemployment insurance laws include language defining suitable employment. Typically, suitable employment is connected to the previous jobs wage level, type of work, and the claimants skills.

    Refusing an offer of suitable employment without good cause will often disqualify individuals from continued eligibility for unemployment compensation.

    For example, if an individuals former employer calls the individual back to work after having temporarily laid the individual off for reasons related to COVID-19, the individual would very likely have to accept the offer to return to work, or jeopardize his or her eligibility for unemployment insurance benefits, absent some extenuating circumstance, such as if the individual tested positive for COVID-19. The job an individual held before the spread of COVID-19 will constitute, in the vast majority of cases, suitable employment for purposes of unemployment insurance eligibility.

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    Can Contractors Qualify For Unemployment Benefits

    Contractors can qualify for unemployment benefits however, it is more difficult than it would be for a full-time employee at a company who loses their job.

    Generally, you are less likely to qualify for unemployment benefits if you can work from home. However, if you can prove that you are unable to work due to one reason or another, you may be able to collect unemployment benefits. Your specific situation will ultimately determine what you are eligible for.

    How Much Might I Get

    States determine unemployment insurance benefit amounts based on multiple factors, including past earnings during a certain period of time, called a base period, set by the state.

    Generally, states also have maximum and minimum amounts for weekly benefits. For example, as of January 2020, Massachusetts had a maximum benefit amount of $1,234 and Mississippis maximum benefit amount was $235 .

    In addition to the weekly benefit amount you qualify for through the states program, you can also get an additional $600 per week through July 31, 2020, thanks to federal coronavirus legislation. The CARES Act also created the Federal Pandemic Unemployment Compensation program, which provides the extra weekly amount.

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    Pandemic Unemployment Assistance Program

    In general, independent contractors cannot collect unemployment benefits since these benefits are designed to benefit employees who work for employers that pay unemployment taxes. The unemployment taxes are used to fund the unemployment system. Since independent contractors do not pay unemployment taxes, they are generally ineligible for unemployment benefits.

    The coronavirus pandemic has changed that general rule, however. In response to COVID-19, Congress passed the Coronavirus Aid, Response, and Economic Security Act or CARES Act on March 27, 2020. This law included the Pandemic Unemployment Assistance program or PUA. PUA provides federal unemployment benefits to all workers who have lost their jobs because of the pandemic, including independent contractors. Currently, the PUA has been extended until March 14, 2021, and it is likely to be extended beyond that date if Congress passes President Bidens coronavirus relief package.

    To qualify for unemployment benefits through the PUA, you must certify one of the following:

    If you qualify for PUA benefits, you must apply through your states unemployment office. PUA benefits are available for up to a maximum of 50 weeks or until the program ends.

    For Independent Workers Struggling To Make Ends Meet Due To Covid

    Independent Contractors And Gig Workers Are Eligible For Unemployment But Still Can’t File

    Nearly all workers have been affected to some degree by the coronavirus pandemic, whether you’ve lost your job, have been working from home, or have taken on extra responsibilities during these uncertain times.

    Freelance workers and independent contractors may be particularly vulnerable to the financial effects of efforts to control the spread of COVID-19, in part because many of these workers didn’t have steady incomes before the pandemic struck — which can make it more difficult to set aside savings. A whopping 76% of independent contractors also revealed that they have lost work because clients have canceled projects due to the coronavirus, according to a recent survey from the Freelancers Union.

    In addition, some of the efforts to help those facing economic hardship may not provide relief for freelancers. For example, one new regulation under the Coronavirus Aid, Relief, and Economic Security Act is that those experiencing financial difficulties as a result of COVID-19 can take larger 401 loans and withdraw more from their retirement funds without facing penalties. However, many independent workers don’t have access to a 401 through their employer, so borrowing from their retirement fund may not be an option.

    That said, there are resources out there for independent contractors that can make these trying times a little easier. They include:

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    I Am About To Exhaust My Regular Unemployment Compensation Benefits What Kinds Of Relief Does The Cares Act Provide For Me

    Under the CARES Act states are permitted to extend unemployment benefits by up to 13 weeks under the new Pandemic Emergency Unemployment Compensation program. PEUC benefits are available for weeks of unemployment beginning after your state implements the new program and ending with weeks of unemployment ending on or before December 31, 2020. The program covers most individuals who have exhausted all rights to regular unemployment compensation under state or federal law and who are able to work, available for work, and actively seeking work as defined by state law. Importantly, the CARES Act gives states flexibility in determining whether you are actively seeking work if you are unable to search for work because of COVID-19, including because of illness, quarantine, or movement restrictions.

    In addition, if you have exhausted the 13 weeks of additional benefits available under the PEUC program, you may be eligible to continue receiving benefits under the PUA program. PUA benefits are available for a period of unemployment of up to 39 weeks, meaning that if you have exhausted regular UC and PEUC benefits in fewer than 39 weeks, you may be eligible to receive assistance under PUA for the remaining weeks within PUAs 39 week period.

    What Are The Rules In California

    California rules: Other states, however, have different rules in place. Some states look not to days worked, but to how much is earned. For instance, in California, in Benefit Decision 5903, the California unemployment insurance appeals board stated: An individual who is self-employed may nevertheless be unemployed However, if such an individual is in receipt of income for services performed in an independent business, such income constitutes wages This means that an individual who is self-employed may still collect unemployment income as long as he does not earn what the state considers excessive wages over the course of a week. California reduces your unemployment benefits dollar for dollar for all amounts you earned above a certain threshold while on unemployment .

    In order to work as an independent contractor in California while maximizing regular unemployment benefits, the individual should either:

    • spread his earnings out over a longer period so he does not earn XE in a single week or
    • condense the work to be performed into a short time so there are fewer weeks when XE is earned and benefits affected .

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