Gig workers rode out the deepest economic downturn on record with an imperfect but unprecedented safety net.
Why it matters: It could set the stage for how they could get access to the benefits afforded to other workers in normal times.
Flashback: Gig workers had been fighting for the right to collect unemployment benefits.
- It comes down to the worker classification issue. Without “employees,” gig companies don’t have to dole out money to funds that pay for unemployment benefits — making their workers ineligible to receive that benefit.
The issue exploded when the pandemic hit. Suddenly there was no demand for services like Uber and Lyft. App-based workers were afraid of contracting the virus.
- It left those workers with little to no income. And they had no access to the traditional unemployment system that a record number of people were turning to.
What happened: Pandemic Unemployment Assistance (PUA), created under the government stimulus package, let gig, freelance and self-employed workers (and others with limited work histories) collect unemployment.
- Companies like Uber lobbied for it. Some argue the separate program validates gig platform claims that workers aren’t employees. (If they were, they wouldn’t need an unemployment program separate from the traditional one.)
The big picture: States have countered in the past that gig and freelance workers couldn't be served by an unemployment insurance program.
- “Now that argument is gone," Michele Evermore, a policy analyst at the National Employment Law Project, tells Axios.
Yes, but: The program has been plagued by problems.
- Delays: Notoriously low-tech and underfunded state labor departments rushed to build out a process for these workers. It was still weeks before they could apply and longer before they were paid.
- Underpayment: A recent government watchdog report said the majority of states have paid out the lowest amount required to these workers — rather than the pay they were eligible for based on what they earned in normal times.
- Overpayment: Some states accidentally paid these workers too much because of administrative errors — and now they’re trying to recoup as much as thousands of dollars, as the New York Times reported this week.
Plus: It’s unclear exactly how many are collecting PUA — let alone how many gig workers have tapped the program. Numbers reported weekly by the Labor Department are inflated for a slew of reasons, including a number of fraudulent claims.
What they’re saying: “States should proactively figure this out and set up rules, rather than have an ad hoc ‘we get we should be covering you, but we have no idea when you’re unemployed and how much you’ve earned,'” Evermore says.
- “How long do you have to sit there with your app driving around before you can declare yourself unemployed?”
What to watch: The safety net is weeks away from being yanked out from underneath them.
- The program is one of two set to lapse on Dec. 26 — unless Congress passes another coronavirus aid bill that extends unemployment coverage.
