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karens
Member

US Independent Contractor Unemployment Insurance

Anyone know the procedure for filing for Unemployment Insurance as an Upwork Freelancer (US)?

29 REPLIES 29

Nobody knows yet. They just passed the bill today (and it still has to be signed into law by the President). This is the first time freelancers and self-employed people have been eligible for unemployment benefits, so I expect it's gonna take a minute for the states to figure out how to handle it.

I had spoken with an Upwork Representative earlier and the following is what I received:

**Edited for community guidelines**

kire_t
Member

I am wanting to apply for unemployment due to COVID-19; however, I know none of the freelancers on the site are actually employees of Upwork. I work solely on Upwork and work has slowed down a lot for me. I have also had clients cancel or place contracts on hold because of the outbreak. Which means I haven't made any money within the past 2 weeks.

 

We also aren't self-employed, so I can't even say I qualify for the stimulus package that way. Can anyone tell me the benefits of applying in the first place if we only work as freelancers? It feels like we're just doomed and being penalized for not being W-2 workers. I could be wrong, but any information you guys have would help.

COVID-19 relief is much better now.  Praise your elected officials for understanding that all kinds of workers got laid off and need help.  Go the Unemployment Insurance website for your state. Be ready to show how much you earned (gross income) -- in California they ask how much gross income you earned each quarter for the past 18 months. For Jan/Feb/March 2020 you would just show Jan/Feb and explain if needed that March is $0.

 

If you file a Schedule C with IRS 1040, you are "self employed" -- same if you are an independent contractor.

 

 

The best strategy may vary from state to state. In Connecticut, for example, there is an argument for submitting a regular claim, even as they have announced they will have to reprogram their system to accommodate the federal funds. I filed based on my sole outstanding contract's being explicitly suspended by the client because of COVID-related suspension of their field research.

vladag
Community Manager
Community Manager

Hi Kire,

 

We see Eve responded to your questions and shared her advice (thanks Eve!).

 

For Kire and Karen,

 

While we can't advise on your questions, we wanted to share that Upwork is a founding partner of the Freelancers Relief Fund, run by the Freelancers Union’s nonprofit subsidiary, Working Today, to assist independent workers in the U.S. experiencing financial hardship as a result of the COVID-19 pandemic. The immediate goal is to raise $500,000 to provide small grants and other assistance for freelancers experiencing hardship. The fund is open to all freelancers in the U.S., with relief targeted toward helping freelancers pay for essential personal expenses including groceries, rent, and other household bills. The fund offers financial assistance of up to $1,000 per freelance household to cover lost income and essential personal expenses not covered by government relief programs, including food, utility payments, and cash assistance to cover income loss. To learn more visit https://www.freelancersunion.org/resources/freelancers-relief-fund/

~ Vladimir
Upwork


Vladimir G wrote:

.....The fund is open to all freelancers in the U.S.


That's nice 🙂 So much for global platform. Upwork's global freelancers made the platform what it is today.... 

 

I'm pretty much speechless.

Yet, based on each State's UI office specifications and requirements.
For instance, my State's UI office is currently "requesting additional guidance from
the USDOL before implementing".


Petra R wrote:

Vladimir G wrote:

.....The fund is open to all freelancers in the U.S.


That's nice 🙂 So much for global platform. Upwork's global freelancers made the platform what it is today.... 

 

I'm pretty much speechless.


I agree that it if Upwork is going to provide any assistance, it would be nice if it were available to all of their freelancers. It sounds like American freelancers are going to receive financial assistance anyway, so people in other countries might be much more in need of help.

 

You will want to check with your State's Unemployment Insurance Office.
The following is specifically from what the President just signed:
Pandemic Unemployment Assistance (PUA) – The Pandemic Unemployment Assistance (PUA) program is separate from the regular unemployment insurance program, which will continue to operate. PUA may cover individuals who are not eligible for regular and extended benefits, or Pandemic Emergency Unemployment Compensation (PEUC).  This could include independent contractors, self-employed, agricultural workers, etc.
I consider myself an Independent Contractor and will continue to pursue this with my State's UI Office.  I would recommend you do the same.
Hope this helps.

Unfortunately, I'm getting a mixed message (bolded) from the CARES Act's list of those the Pandemic Unemployment Assistance will cover. We all have the ability to "telework for pay" -- in fact,  that's the nature of our employment.

 

"Specifically, the CARES Act provides that a “covered individual” includes anyone who self-certifies that they are able and available to work but is unemployed or partially unemployed due to any of the following:

 

  • Has been diagnosed with COVID-19 or is experiencing symptoms and seeking a medical diagnosis;
  • A member of the individual’s household has been diagnosed with COVID-19;
  • The individual is providing care for a family member or household member who has been diagnosed with COVID-19;
  • The individual is the primary caregiver for a child or other person in the household who is unable to attend school or another facility as a direct result of COVID-19;
  • The individual is unable to reach the place of employment because of a quarantine imposed as a direct result of COVID-19;
  • The individual is unable to work because a health care provider has advised the individual to self-quarantine due to COVID-19 concerns;
  • The individual was scheduled to commence employment and does not have a job or is unable to reach the job as a direct result of COVID-19;
  • The individual has become the breadwinner or major support for a household because the head of household has died as a direct result of COVID-19;
  • The individual has to quit their job as a direct result of COVID-19; or
  • The individual’s place of employment is closed as a direct result of COVID-19.

The Secretary of Labor may establish additional eligibility criteria as well. Importantly, the law not only applies to employees, but also to those who are self-employed (independent contractors). Individuals are not eligible for benefits if they have the ability to telework with pay or are receiving paid sick leave or other paid leave benefits.

Pandemic Unemployment Assistance (PUA) – The Pandemic Unemployment Assistance (PUA) program is separate from the regular unemployment insurance program, which will continue to operate. PUA may cover individuals who are not eligible for regular and extended benefits, or Pandemic Emergency Unemployment Compensation (PEUC).  This could include independent contractors, self-employed, agricultural workers, etc.
Right?  What State are you??

In the same way the terms "freelancer" and "self employed" are defined legally by whether you file your taxes with a 1040 Schedule C, the term "telework" is defined legally in the Telwork Enhancement Act and is outlined by the U.S. Office of Personnel Management at 
https://www.opm.gov/faqs/topic/telework/index.aspx?page=1

"The Telework Enhancement Act defines telework or teleworking as a work flexibility arrangement under which an employee performs the duties and responsibilities of such employee's position, and other authorized activities, from an approved worksite other than the location from which the employee would otherwise work.  In practice, telework is a work arrangement that allows an employee to perform work, during any part of regular, paid hours, at an approved alternative worksite (e.g. home or telework center)."

Since upwork independent contractors are not employees working from an approved worksite  during regular, paid hours, you qualify for Pandemic unemployment insurance as a gig worker, again, as defined by your filing for taxes using a 1099. 

Please note: the problem is not whether you qualify--you do--the problem is how you will "self certify" your earningins and whether that self certification will be  accepted. If you listed your earnings on your 1040 for 2019, you will be fine. However, if you did not report your earnings, you will have screwed yourself because unlike many other online platforms that operate on the backs of gig workers, neither Upwork nor its workers issue workers a 1099, which is a crock of shot. You will need your schedule C.

Typically, I am sharper than a bowling ball, however ...
Thanks so very much for bringing up the 1040 C aspect of "employment proof".I often wondered why I claimed every penny from Upwork, as 1099's have becomepractically non existent.  Now, I realize I not only did the right thing, but will hopefully
prove helpful in offering "employment proof" to my State's UI office.
Although, my husband and I have NOT filed taxes for 2019 as of yet, I suspect I can
use the Upwork reporting system to pull 2019 earnings, paired with my 2018 1040 C?
Thanks again!


Upworkers do not "telework," and the lawmakers have designed a bill that does include us.  Simply put, finding work online and telework are two legally distinct processes as noted by the government.

In the same way the terms "freelancer" and "self employed" are defined legally by whether you file your taxes with a 1040 Schedule C, the term "telework" is defined legally in the Telwork Enhancement Act and is outlined by the U.S. Office of Personnel Management at 
https://www.opm.gov/faqs/topic/telework/index.aspx?page=1

"The Telework Enhancement Act defines telework or teleworking as a work flexibility arrangement under which an employee performs the duties and responsibilities of such employee's position, and other authorized activities, from an approved worksite other than the location from which the employee would otherwise work.  In practice, telework is a work arrangement that allows an employee to perform work, during any part of regular, paid hours, at an approved alternative worksite (e.g. home or telework center)."

Since upwork independent contractors are not employees working from an approved worksite  during regular, paid hours, you qualify for Pandemic unemployment insurance as a gig worker, again, as defined by your filing for taxes using a 1099. 

 

To say this differently, Upworkers find work online, but they do not telework. They are gig workers that use online resources to find work, but they do not telework. The lawmakers understood that clients worldwide are impacted and that our income has plummeted, sometimes to zero.  That is why they used a legal term in the CARES act.  

 

NOW--THE BAD NEWS!!!!!!!!

Please note: the problem is not whether you qualify--you do--the problem is how you will "self certify" your earningins and whether that self certification will be  accepted. If you listed your earnings on your 1040 for 2019, you will be fine. However, if you did not report your earnings, you will have screwed yourself because unlike many other online platforms that operate on the backs of gig workers, neither Upwork nor its workers issue workers a 1099, which is a crock of shot. You will need your schedule C.

As I indicated earlier, I am in hopes Upwork Earnings Reporting will suffice for 2019, as my husband and I have not filedincome taxes as of yet.  Upwork 2019 Earnings Report plus 2018 1040 C.  Will that work to self certify??
Thanks!!



KAREN S wrote:
As I indicated earlier, I am in hopes Upwork Earnings Reporting will suffice for 2019, as my husband and I have not filedincome taxes as of yet.  Upwork 2019 Earnings Report plus 2018 1040 C.  Will that work to self certify??
Thanks!!

From everything I've read, no, as far as federal funds may (or may not) go. Why not file for 2019?

The President gave an extension, so taxes are not due until mid June.

No, not June. The deadline for both federal and state is now July 15th.

Thanks.


KAREN S wrote:
The President gave an extension, so taxes are not due until mid June.

And...? Somehow that makes it easier to patch something together that you're not sure will work, vs. putting the effort into something that has been announced will work?

My husband is in the Media.  We require very specific tax serviceswhich require in person meeting.  We are not choosing to do that at this time.Now, If the Certificate of Employment with my 2018 C will not work,then I suspect we will reconsider, or go a different route.
I have no State UI parameters for self certification at this time, as my state is awaiting guidancefrom the USDOL before proceeding.


KAREN S wrote:
My husband is in the Media.  We require very specific tax serviceswhich require in person meeting.  We are not choosing to do that at this time.Now, If the Certificate of Employment with my 2018 C will not work,then I suspect we will reconsider, or go a different route.
I have no State UI parameters for self certification at this time, as my state is awaiting guidancefrom the USDOL before proceeding.

Sorry, Karen, it was impertinent of me to ask about how you conduct your business. The most common recommendations for verifying Upwork income for a tax year are the Earnings by Client report (simpler) or the Transaction History (includes non-commission expenses like connects). Not sure if you mean Certificate of Employment or Certificate of Earnings. The latter has been repeatedly reported as not helpful in this context.

Thank you.

The bill only became law today. The provision for unemployment benefits that might apply to us is called "Pandemic Unemployment Assistance." It's a new federal program that might be administered by the states. Note, though:

"Pandemic Unemployment Assistance...extends benefits to gig workers, contractors and others who wouldn't otherwise qualify for unemployment compensation but cannot work due to the coronavirus emergency." (emphasis added)

 

Not all gig and contract workers work online. This relief may not be designed for us or include us.

source: NBC News 


Douglas Michael M wrote:

The bill only became law today. The provision for unemployment benefits that might apply to us is called "Pandemic Unemployment Assistance." It's a new federal program that might be administered by the states. Note, though:

"Pandemic Unemployment Assistance...extends benefits to gig workers, contractors and others who wouldn't otherwise qualify for unemployment compensation but cannot work due to the coronavirus emergency." (emphasis added)

 

Not all gig and contract workers work online. This relief may not be designed for us or include us.

source: NBC News 


I hadn't thought of that! I assumed that freelancers would fall under the category "can't work due to the coronavirus emergency", if only because there isn't enough work available? But you may be right.

 

 

chalmers-erin
Member

Colorado is asking we give them time as they have not received direction from the feds yet and cannot update their systems until they have them. I would check your state unemployment website am, noon and pm. Good luck and stay healthy.

Upwork is not in charge of unemployment insurance.

 

I would strongly urge any freelancers interested in this topic to talk to their government officials.

 

Is it possible that Upwork may post announcement or help pages about the topic? Yes. That is possible.

 

But no Upwork users should be trying to contact Upwork customer support about this.

I am quite aware that Upwork is NOT in charge of providing Pandemic Unemployment Assistance, however, each state may,or may not, require certain verifications of IC work, which if required, Upwork will be delighted to provide this paper work if
warranted.  That was why I originally reached out to Support.


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