Freelance Workers Shut Out of Pandemic Unemployment Aid Could Receive Relief From New Congressional Bill

congress The U.S. Capitol Building Washington, DC.
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The U.S. Capitol Building in Washington, DC.

The proposed legislation would allow states to offer Pandemic Unemployment Assistance to mixed earners who failed to qualify under the CARES Act.

While millions out of work American citizens have been receiving $600 each week in federal Pandemic Unemployment assistance, due to a flaw in the CARES Act, many with mixed income across staff employment and freelance gigs have been prevented from receiving state unemployment benefits based on the full scope of their earnings. Now, a new Congressional bill aims to change that.

Introduced on Monday (July 20) by U.S. Representatives Adam Schiff and Judy Chu (both D-CA) and co-sponsored by 19 others, the Mixed Earner Pandemic Unemployment Assistance Act would allow individuals who derive much of their income from freelance work – a group that includes the majority of independent music workers – to opt into the freelancer-focused Pandemic Unemployment Assistance (PUA) program, which offers state unemployment benefits to freelance workers for the first time in U.S. history.

First signed into law in March, the CARES Act barred freelancers who surpassed the minimum W2 earnings requirement for their state’s traditional unemployment system from receiving PUA benefits. That led many self-employed workers to receive unemployment relief on the basis of their relatively insignificant W2 income, leaving them without the assistance they needed to pay essential bills during the coronavirus-induced shutdown. Under the new bill, those workers would be granted access to unemployment relief on the basis of their earnings from both W2 and freelance work combined.

Additionally, the bill will provide full retroactive unemployment payments to workers who did not previously qualify for either regular unemployment or PUA, including the additional $600 weekly federal benefit implemented by the CARES Act.

To qualify for the transition to PUA, a mixed earner must have brought in at least $7,250 from self-employment earnings in 2019, have a qualifying unemployment reason for PUA and be otherwise eligible for state unemployment benefits. Notably, the bill provides significant leeway for individual states to decide “whether and when” to implement the expanded coverage – a condition that could leave self-employed workers in states that choose to delay or forgo implementation waiting indefinitely for more relief.

“For many workers, the relief provided by the CARES Act is making a crucial difference in helping make ends meet during this unprecedented period of disruption,” said Rep. Schiff in a statement. “Yet due to the nature of independent work, particularly in industries like entertainment, many workers are currently excluded from Pandemic Unemployment Assistance because they earn a living through a mix of self-employment and traditional W-2 jobs. Our bill will ensure that mixed earners are no longer excluded from this critical assistance because of the nature of their employment and income.”

Added Rep. Chu, “The coronavirus pandemic brought the economy to a halt for millions. Fortunately, we were able to quickly respond and through the CARES Act put support into the hands of workers who need it. But our traditional system of supporting unemployed workers was not set up for nontraditional workers with mixed income, like the many artists and craftspeople in my district who supplement a W-2 with independent gig work. There is no reason these workers should be penalized now for having a mixed income. I’m proud to work with my colleague Rep. Adam Schiff to make this common sense change to recognize the various ways our constituents earn a living and ensure they are rightly compensated for that during this crisis.”

The Mixed Earner Pandemic Unemployment Assistance Act was crafted with input from a number of organizations, including many that represent self-employed music workers. Among others, they include the Recording Academy, Music Artists Coalition, the Recording Industry Association of America (RIAA), the Future of Music Coalition, American Association of Independent Music, Songwriters of North America, ASCAP, BMI and SESAC.

In a release, Recording Academy chair and interim president/CEO Harvey Mason Jr. praised the new bill. “The pandemic has exposed that our nation’s unemployment system is not designed for all workers, like music creators, leaving so many vulnerable and without assistance,” he said. “The Mixed Earner Pandemic Unemployment Assistance Act is a critical solution that will help so many in our community receive the fair benefits that they deserve. The Recording Academy thanks Representatives Adam Schiff and Judy Chu for their tireless efforts to ensure that all workers have equitable access to unemployment benefits as our creative community faces the long-term effects of this unprecedented crisis.”

The Mixed Earner Pandemic Unemployment Assistance Act, which does not yet have a companion bill in the Senate, represents a significant victory for advocates of self-employed workers -- though there are more hurdles ahead. As of this writing, the $600 weekly federal unemployment benefits provided under the CARES Act are due to run out at the end of July, threatening to strike a major blow for workers who have come to depend on the extra aid.

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