Can Independent Contractors Collect Unemployment?

Learn more about the Pandemic Unemployment Assistance Program and its qualifications and application process.

Updated on August 16th, 2021

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The federal government has extended unemployment benefits to include independent contractors, self-employed individuals, and gig workers in response to COVID-19 (Coronavirus).

Pandemic Unemployment Assistance Program Benefits:

Section 2102 of the CARES Act establishes supplementary unemployment benefits through the Pandemic Unemployment Assistance (PUA) program.

The PUA makes unemployment insurance available to individuals who are not eligible to receive regular unemployment benefits under state or federal programs. This is provided that these individuals find themselves not able to work due to COVID-19.

What Benefits Do You Recieve?

If you are eligible for PUA, you will receive up to 79 weeks of unemployment insurance payments through your state unemployment agency. Your weekly payments will be calculated according to the rules of the state you work in, provided that your weekly PUA payment is not less than half of the average weekly UI payment in the state.

The Act allows that PUA payments may cover periods of unemployment from January 27, 2020, through December 31, 2020. This has since been extended. However, the PUA benefits will end during the week that ends on September 4, 2021.

Under the Federal Pandemic Unemployment Compensation provision of the CARES Act, all unemployment recipients will also receive an additional $300 per week until September 4, 2021.

Who Is Eligible for Pandemic Unemployment Assistance?

You are eligible for PUA benefits if you do not qualify for regular UI benefits or have already exhausted your state benefits. This includes independent contractors, gig workers, and self-employed individuals. You may apply for PUA benefits if:

  • You are diagnosed with COVID-19 or are seeking a diagnosis.
  • You have a member of the household who is diagnosed with COVID-19.
  • You are caring for a family or household member diagnosed with COVID-19.
  • You are the primary caregiver for a child whose school or care facility is closed, due to COVID-19.
  • You meet any additional criteria specified by the U.S. Secretary of Labor.

Who is Not Eligible for Pandemic Unemployment Assistance?

You are not eligible for PUA benefits if:

  • You are able to work or run your business from home.
  • You are receiving paid sick or family leave.
  • You choose not to work for reasons not relating to COVID-19.

The Application Process:

If you qualify for Pandemic Unemployment Assistance, your benefits will be administered through your state's unemployment office. To find out if you qualify and to apply online, log onto the CareerOneStop website and select your state from the dropdown list.

How Long Does It Take?

The CARES Act incentivizes states to waive any applicable benefit waiting periods. While you may be able to receive unemployment insurance straight away, you may have to wait a few weeks before being paid out.

FAQs:

Do independent contractors qualify for unemployment insurance?

Yes, with the passing of the CARES Act, independent contractors, gig workers, and self-employed individuals are eligible for unemployment insurance if they are unable to work due to COVID-19.

How much will independent contractors get from unemployment?

Your unemployment benefits will be calculated based on your previous earnings and vary depending on the state you live in. The PUA program stipulates that your weekly payment may not be less than half the average weekly UI payment for your state.

Do independent contractors qualify for Federal Pandemic Unemployment benefits?

Yes, all UI recipients, including independent contractors will receive an additional $300 per week over and above any state benefits you receive, until September 4, 2021.

How long does it take for independent contractors to be paid out for unemployment?

The CARES Act incentivizes states to waive any waiting periods for receipt of benefits. However, due to the high rate of new applications, recipients can expect to wait a few weeks before they are paid out.

Who is not eligible for unemployment insurance under the CARES Act?

  • Individuals who are able to work from home or run their business from home.
  • Anyone receiving sick pay, family leave pay or state employment benefits.
  • Independent contractors and self-employed individuals who choose not to work for reasons not relating to COVID-19.