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Tuesday, March 31, 2020

What the CARES Act Means for Gig Workers

This is from I figured not everyone is clear about what Gig workers get out of the CARES act, so I am sharing this.
This past week, Congress and the White House signed off on a $2.2 trillion stimulus package known as the CARES Act. Short for “Coronavirus Aid, Relief, and Economic Security,” the legislation aims to provide emergency assistance and health care response for individuals, families, and businesses affected by the 2020 coronavirus pandemic. Along with providing loans to both large and small businesses, boosting healthcare funding, and extending payroll tax filings, the bill expands unemployment benefits for those who have lost their jobs as a result of the outbreak.

Along with offering an added $600 per week for four months—in addition to what state programs pay—the CARES Act extends eligibility for unemployment. Specifically, the legislation will cover self-employed and independent contractors.

Before the bill’s passage, Senator Ron Wyden (D-OR) said, “The unemployment insurance system, created during the Great Depression, is strikingly out-of-date and completely unequipped to deal with our current crisis.”
 A Unique Set of Challenges for the United States 
 Governments around the world are also injecting trillions of dollars into their economies through fiscal and monetary measures. In the United Kingdom, government programs aim to provide 80% of employees’ wages. Australia is offering a mixture of tax cuts and investment incentives. Ireland passed a $3.1 billion program to ward off coronavirus economic fallout.

While every government has difficult decisions to weigh, the US faces a unique set of challenges. According to CNBC, in the US, “57% of the workforce is either paid hourly or self-employed.” Moreover, while it can be difficult to gather statistics about the scope of the gig economy, In 2018, Forbes estimated that nearly 60 million people, more than one-third of US workers, are a part of this sector. 

Even before the coronavirus pandemic, companies like Lyft (LYFT) and Uber (UBER) faced challenges from states and lawmakers over how to classify their drivers. However, as the historic stimulus bill was being negotiated, Uber CEO Dara Khosrowshahi asked President Donald Trump to include relief in the legislation for gig workers who can no longer earn income as people are confined to their homes. Ultimately, the coronavirus aid package included something called the “Pandemic Unemployment Assistance,” which allows freelancers and independent contractors to “half the average unemployment benefit in their state and an extra $600 per week,” according to USA Today.
 The Gig is Up 
 Most agree that gig workers need a safety net during the crisis. However, debates over whether or not these workers need to be classified as employees in the eyes of the law resurfaced during stimulus bill negotiations. The current setup allows tech companies to side-step normal expenses and avoid paying for benefits like healthcare. Additionally, organizations like ride-sharing companies and food-delivery services are not required to remit taxes to the government during good times for programs like unemployment insurance during the bad times. As a result, some are calling this a “big tech bailout.”

To that end, a 2015 decision classifying on-demand delivery workers at Postmates as employees was reinstated Friday by New York’s Court of Appeals. This will make these workers eligible for the unemployment insurance in the CARES Act, like others who have been laid off in traditional industries. 

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