Warner, Smith propose fix to COVID-19 unemployment program

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U.S. Sens. Mark Warner (D-VA) and Tina Smith (D-MN) have introduced legislation to help ensure Americans who earn a living through a mix of traditional and independent employment income can fully access unemployment benefits.

The Mixed Earner Pandemic Unemployment Assistance Act of 2020 would open up financial relief made available under the Pandemic Unemployment Assistance program to more gig workers.

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.

The program 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.

“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 Sen. 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 Sen. 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.

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