Unemployment Benefits Update for 1099 and ‘Gig’ workers

Pandemic Unemployment Assistance (PUA)

Applying for and being denied benefits under the regular program can help establish eligibility under the new temporary program. (Yes this sounds odd, but this is the directive from IDES).

PUA provides up to 39 weeks of federally funded unemployment benefits to individuals not typically eligible for unemployment benefits, including independent contractors and sole-proprietors who have become unemployed as a direct result of COVID-19.

In Illinois, every individual who is unemployed or underemployed should file a claim for unemployment benefits, even if they believe they are not covered by the unemployment system. There are two reasons Illinoisans currently unemployed through no fault of their own should still file a claim for regular unemployment benefits with IDES, even if they have been told they’re not covered by the state’s regular unemployment insurance program – because they’re an independent contractor, part of the “gig economy,” or for some other reason.

First, it’s possible that whoever told them they were not covered was wrong. Workers who are employees covered by the unemployment insurance system are sometimes told they’re not. Even if an individual’s employer does not consider the worker to be covered and doesn’t pay unemployment taxes on the individual’s wages, the individual can qualify for benefits if IDES determines he or she is covered under state law. An employer’s failure to contribute to the unemployment system will not impact a claimant’s eligibility for benefits. Although eligibility for benefits cannot be guaranteed, nothing prohibits people from filing a claim for regular benefits, as long as they truthfully complete the application.

Second, the PUA program has been established for individuals who are unemployed for reasons attributable to COVID-19 and not covered by the state’s regular unemployment insurance program. To establish eligibility under the new program, the claimant will have to demonstrate he/she is not eligible under the regular program. Again, applying for and being denied benefits under the regular program can help establish eligibility under the new temporary program.

For more information from the Illinois Department of Employment Security (IDES) here.