10 senators unveil legislation to fix unemployment relief for self-employed and ‘gig’ workers

The Mixed Earner Pandemic Unemployment Assistance Act would ensure independent workers and self-employed Americans with both 1099 compensation and W-2 wages aren’t disqualified from participating in critical unemployment benefits

WASHINGTON — Today, U.S. Senators Chris Coons (D-Del.), Mark Warner (D-Va.), Tina Smith (D-Minn.), and 7 other senators introduced the Mixed Earner Pandemic Unemployment Assistance Act of 2020 to help ensure Americans who earn a living through a mix of traditional (W-2) and independent employment income (1099) can fully access the financial relief made available under the Pandemic Unemployment Assistance (PUA) Program.

Following March passage of the CARES Act, states were directed to establish PUA to distribute benefits to workers who would normally not be eligible for unemployment assistance, such as self-employed workers or freelancers, to help them stay afloat during the COVID-19 economic crisis. However, the program has unintentionally disqualified these non-traditional workers from participating in the PUA program if they have mixed sources of income that make them eligible to receive the minimum benefit in regular unemployment insurance. This affects any primarily self-employed or independent worker who receives a secondary source of W-2 income, such as working part-time as a server or caterer, retail worker, entertainment worker, or otherwise are hired by a company part-time as an employee.  

“In today’s economy, millions of Americans classify as freelance workers or ‘gig’ workers, and those men and women are being impacted by the pandemic and our economic crisis just like everyone else,” said Senator Coons.  “The expanded unemployment benefits passed by Congress in response to the pandemic have kept millions of Americans out of poverty, and we need to ensure that support continues for all American workers who can’t yet go back to work at no fault of their own. A glitch in the program has caused many Delawareans with both wage and self-employed income to receive an unfairly low benefit. Our bill will ensure that freelance and ‘gig’ workers get the fair unemployment benefit they need to endure this pandemic.”

“As the nation continues to deal with the economic devastation caused by COVID-19, we’ve got to ensure that workers have the assistance they need to cope with the dire financial straits many are unexpectedly finding themselves in,” said Senator Warner. “While Congress extended a lifeline under the Pandemic Unemployment Assistance Program, a large swath of gig and independent workers were unexpectedly left out from receiving the full benefits they are entitled to. Today, we’re introducing a commonsense fix to help millions of independent, freelance, and entrepreneurial workers who were left out of this critical safety net at no fault of their own.”

“In the current economic crisis we must do all we can to support Americans who have been forced to go without work," said Senator Smith. "Earlier this year, Congress enacted a historic expansion of unemployment insurance, but some people who worked multiple jobs have found themselves in an unintended no man’s land between unemployment programs that has resulted in drastically reduced unemployment compensation. I’ve heard directly from several Minnesota workers caught in this position who are now struggling to get by. That’s why I’m working to fix this problem and help these families get the assistance they need during difficult times.”    

According to recent figures by the Bureau of Labor Statistics, as many as 1 in 10 American workers may presently participate in the labor market with gig, independent, and self-employed work as their primary form of occupation. Last week, based on the unadjusted data released by the U.S. Department of Labor, 2 million Americans filed new unemployment claims – 1.2 million for regular unemployment insurance and almost 1 million for the PUA program. The data also indicates that 33.8 million Americans are either receiving unemployment benefits or have applied and are awaiting approval. Out of the total number of unemployment claims, more than 15 million have been for the PUA program.

The Mixed Earner Pandemic Unemployment Assistance Act would:

·       Allow workers who earn a minimum of $7,250 independent (e.g. 1099) income to request reconsideration into receiving PUA benefits instead of regular state unemployment compensation.

·       Allow states to opt-in to implement this expanded coverage for mixed earners, acknowledging that not every state will be ready to implement this change.

In addition to Coons, Warner, and Smith, the bill was introduced by Senators Richard Blumenthal (D-Conn.), Kamala Harris (D-Calif.), Ed Markey (D-Mass.), Amy Klobuchar (D-Minn.), Dianne Feinstein (D-Calif.), Elizabeth Warren (D-Mass.), and Martin Heinrich (D-N.M.). A copy of the bill text can be found here. Companion legislation was also introduced in the House of Representatives by Reps. Adam Schiff (D-Calif.) and Judy Chu (D-Calif.).

The legislative fix comes on the heels of a letter sent by the ten senators to urge Senate leaders to ensure that these workers who have mixed forms of income can access the PUA program – which is available through December 2020 – as negotiations between Senate Republicans and Democrats continue.

“It is clear that allowing workers in alternative work arrangements to access the PUA program is an important lifeline for many during this crisis,” the senators wrote in a letter to Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, and the Chairman and Ranking Member of the Senate Committee on Finance. “However, for workers whose primary source of income is independent, freelance, or self-employed work but who also receive some W-2 wages as a secondary source of income – such as working part-time as a server or caterer, retail worker, entertainment worker, or otherwise are hired by a company part-time as an employee – an exclusion leaves them without access to a safety net for their primary source of income. Specifically, we hope that modification of the PUA program can be made to allow individuals with over $7,250 in self-employed income to request a reconsideration of their PUA eligibility, where both their 1099 and W-2 income will be aggregated for their weekly benefit calculation. Acknowledging that some states will be better positioned than others to implement this, participation in the fix to the PUA process should be optional for individual states.”

The bill text can be found here. A list of organization endorsements can be found here.

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