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There is no denying that the travel industry was hit very hard when the world started sheltering in place due to Covid-19. Numerous airlines needed government assistance, big hotel chains like Marriott had to enact paycuts and layoffs, and major attractions were forced to shutter up. With no one traveling from place to place, except a few essential workers, rideshare companies have also taken a major hit. Of course, the hardest hit members of the rideshare companies are the drivers.
Stories of drivers earning only $7 a week compared to their previous weekly income of $400 are numerous. Not only do drivers have to worry about their dwindling incomes but the fear of catching Coronavirus while out on the road is very real. Up until the stimulus bill was released, drivers were quite stuck as they did not previously qualify for unemployment due to their contractor status. However, the stimulus package outlined that contractors and the self-employed are now eligible for unemployment under the CARES act. Additionally, the government is adding an additional $600 per week onto unemployment checks until the end of July. Between traditional unemployment payments and the $600 boost, this should cover most if not all of your income. Ready to apply for unemployment? Below we will outline where to begin, the steps you will need to take, and some snags you may hit along the way.
UPDATE: Some states are now mandating that the self-employed and contractor workers file for unemployment through a separate form/portal. As this is a new form of unemployment it might take a few weeks for the portal or form to be ready in your state. However, you will be eligible for back pay.
The first step when filing for unemployment is to find the correct form for your state. Each state administers a separate unemployment insurance program, but all states follow the same guidelines established by federal law. We have found that this website is a great place to start. Once you have navigated to careeronestop.org , scroll down until see you see a dropdown menu labeled "Location". Click on the dropdown and find your state, then click search. This will lead you to state specific unemployment information as well as the form you will need to fill out.
While there may also be directions to complete the form in person at an unemployment office or to call your unemployment office to begin the process, we highly recommend starting the process online if at all possible. While the online forms can be a bit "glitchy", this still seems the fastest way to submit your initial claim. With millions of Americans currently out of work, the in person or over the phone wait queues are insanely long. In fact, many New Yorkers have complained about calling their unemployment hotline thousands (yes, thousands!) of times without being able to get through. If you need to call in for a part of your application or this is a step that your state requires, try calling as soon as the office opens in the morning for your best chance of reaching a caseworker.
Once you have successfully filed your initial claim, be prepared to follow up with additional information. This might include proof of your quarterly earnings or further information on the company in which you completed contract work for (Uber or Lyft). It is a good idea to try and get this information ahead of time so when it is asked for you can quickly submit it without holding up the process further. Some documents that serve as proof are your previous 1099's, paystubs, and even potentially screenshots of your earnings within the Uber app (though this may also need a signed affidavit to be considered official).
Once you have submitted everything, you enter a waiting period to be approved. Unfortunately, there is no guideline on how long this waiting period may take but many are estimating that the wait for your first check will be longer than normal with the current unemployment rates. Additionally, we have recently seen in some states (such as Massachusetts), that they are currently holding off on approving contractor or self employed unemployment claims as they are still waiting for more information from the feds on how to handle these new types of claims under the CARES act. However, we still highly encourage you to submit your claim as soon as possible so when they do start approving these claims you will already be in queue.
Another common question is "How much will I receive for Unemployment"? Traditionally, Unemployment doles out around half of your salary or if you make over a certain threshold, you will be given around $500 (give or take per state) per week. With the CARES act, you will also receive an additional $600 per week until the end of July. However, as a contractor, the amount you may receive is a bit more fuzzy as contractors do not receive a standard weekly salary. Many people seem to think though that you will be eligible for about half of what you traditionally bring in taking out any outliers.
Have you applied for unemployment yet? What snags are you hitting in your state? Let us know on our forum!