Gig workers are still eligible for unemployment benefits under the new stimulus package — but they need to provide proof of earnings

Gig workers are still eligible for unemployment benefits under the new stimulus package — but they need to provide proof of earnings

In an effort to combat fraudulent unemployment insurance claims, which have been rampant in some states during the pandemic, gig workers and self-employed workers will be required to provide documentation of their earnings to get unemployment benefits under the new stimulus package. 

Gig workers and self-employed people aren’t traditionally eligible for unemployment benefits, but under the CARES Act, they could receive benefits through the Pandemic Unemployment Assistance program. To do so, they were only required to provide an estimate of their earnings.

That made it easier for states to process jobless applications, but under the new legislation it will “by and large be a pain” for state workforce agencies to process applications for PUA benefits, said Michele Evermore, a senior policy analyst at the National Employment Law Project, an advocacy organization focused on workers’ rights.

“All states have been accepting documents [of past earnings], they just haven’t been requiring them,” she said. The Department of Labor hasn’t formally specified what kind of documentation workers will be required to provide.  A DOL spokesman told MarketWatch that the agency expects to have more specific guidance on documentation later this week

In guidance published on Dec. 30, three days after President Donald Trump signed the $908 billion stimulus package into law, the DOL stated only that individuals will be required to “provide documentation substantiating employment or self-employment.” It’s most likely that states will ask claimants to provide a 1099 tax form, said Elizabeth Pancotti, a policy adviser at the pro-worker advocacy group Employ America. 

It’s also likely that state workforce agencies will have to devote a lot of time contacting people to gather that documentation, especially if they returned to work and were laid off again, Evermore said.

Importantly, first-time applicants for PUA benefits will have only 21 days from the time they submit their application to submit documentation of their earnings, unless they are told otherwise by their state’s labor department. People who were already receiving PUA before Dec. 27 will have 90 days to submit income documentation. 

The legislation also provides some leeway for workers who may not have any formal documentation of their earnings if they can provide “good cause” for that lack of paperwork, Evermore told MarketWatch. 

In addition to the 11-week extension of the PUA program, which otherwise would have expired if the new stimulus package hadn’t passed, jobless Americans will also receive an additional $300 per week in federal unemployment benefits on top of their state-level benefits. 

Related: When will Americans receive the extra $300 in unemployment benefits?

Jobless individuals in Arizona, California, New York, Louisiana, Rhode Island and Tennessee could begin to receive that additional aid this week, according to their state labor departments. 

It could take another three to four weeks at a minimum for other states to begin making payments, Pancotti told MarketWatch.

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