Florida has a greater percentage of its workforce classified as independent contractors or gig economy workers than any other state in the country, but in the three weeks since the federal government passed an unemployment assistance act that is supposed to help them, they’ve been unable to tap into the aid.
On Thursday, after workers and lawmakers tried unsuccessfully to figure out how the overwhelmed state-run unemployment system will handle their claims, the state announced it is planning to launch a separate claims site for gig workers — but it won’t be ready for another seven to 10 days.
“While we’ve made some progress in recent days, it’s not nearly enough,” Gov. Ron DeSantis said at a Thursday news conference in Tallahassee. “We have an unprecedented amount of claims and we’ve got to work through them.”
DeSantis, who ousted the head of the state’s unemployment system on Wednesday, said independent contractors and gig economy workers will be able to apply for $600 per week in unemployment benefits for up to four months — the measure passed by Congress as part of the $2 trillion coronavirus relief bill, called the CARES Act.
In the bill, Congress explicitly included independent contractors and gig workers, who are not eligible to apply for unemployment benefits in many states, because they recognized the impact the coronavirus pandemic would have on their sources of income.
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DeSantis has come under fire for the meltdown of the state’s unemployment system, admitting on Wednesday that he did not know how many Floridians have received unemployment benefits. Thursday, he said about 33,000 claims had been paid, with the state reporting a backlog of more than 800,000.
At least 22 million Americans have filed for unemployment in the last four weeks according to the Labor Department, and Florida’s unemployment claims are likely undercounted because of the state’s faulty website.
State representatives and members of Congress say their offices have tried to help independent contractors — such as rideshare drivers — but they’ve been given little guidance from the Florida Department of Economic Opportunity, which is supposed to administer the relief money.
Independent contractors and gig economy workers make up 22 percent of Florida’s workforce, according to a February study by ADP Research, the highest percentage of any state in the country.
‘There has been a lack of clarity’
“There’s a lot of people who are eligible for the federal program who are just confused,” said state Sen. Jose Javier Rodriguez, D-Miami. “There has been a lack of clarity, in addition to the fact that they have not created the application. We have a program and potentially billions of dollars but what stands in the way is creating a website that allows people to apply for it.”
Rodriguez said he was given conflicting information regarding independent contractors and gig economy workers from DEO executive director Ken Lawson, who was ousted from overseeing the state’s unemployment system by DeSantis on Wednesday.
Lawson’s replacement, Department of Management Services Secretary Jonathan Satter, said during Thursday’s news conference with DeSantis that the state is now creating a portal for independent workers to apply for federal relief but added that the site won’t be ready for at least a week and maybe as long as 10 days. Satter didn’t offer details, but said that gig workers who have already filed an unemployment claim will be “swept into” the new portal.
“If they have maybe gone through the traditional unemployment process and they’re deemed ineligible, if they’re eligible for the $600 payment, they’re being swept into that,” he said.
Rodriguez said Lawson had previously told him that those workers should apply for benefits with the expectation that they’ll be denied as the state sets up an alternative application system to comply with federal law. Rodriguez said he never received an answer when asked if workers who applied under the current system would be transferred to the new system.
“There’s not an application,” Rodriguez said. “There’s this expectation created that there’s assistance, and there is assistance, but they can’t apply for it.”
Other states also have begun to announce plans to get unemployment insurance in the hands of gig workers.
California Gov. Gavin Newsom said Wednesday that the state would have a Pandemic Unemployment Assistance program — that includes independent contractors — set up within two weeks. The District of Columbia has an April 28 target date for its new unemployment system that includes gig workers to go live.
Florida’s Department of Economic Opportunity said in a Thursday night press release that it will provide more information “in the coming week” on how workers who are newly eligible for unemployment insurance under the federal law but were previously ineligible for help can file for benefits. States are required to administer federal unemployment benefits.
State Rep. Anna Eskamani, D-Orlando, said the state decided to mark independent contractors and gig economy workers who file for unemployment as “ineligible” instead of creating a side category where their applications could wait in limbo until the federal program could be put into place in Florida. She said applicants who were denied despite applying after Congress passed the coronavirus relief bill were told by DEO they should not appeal their status “until they implement the CARES Act” at the state level.
“It shouldn’t take a month and a half to roll out a sign-up tool,” Eskamani said. “Florida’s lack of communication is the only thing they’re good at so far.”
Out of money
A potential alternative source of relief for independent contractors and gig economy workers is also out of money, at least for now.
Independent contractors and gig economy workers who used a 1099 form to file their taxes with the IRS were eligible to apply for relief through the Paycheck Protection Program, a program run by the federal government’s Small Business Administration and passed into law, pushed in part by Florida Sen. Marco Rubio.
The program was designed to help small businesses fulfill payroll obligations and keep workers off of state-based unemployment programs. It included independent contractors and gig economy workers — who work for themselves — because Rubio acknowledged that many state-based unemployment systems would take weeks to get new systems for doling out benefits up and running.
But many independent contractors weren’t able to apply for the Paycheck Protection Program, or PPP, because they did not meet requirements issued by banks tasked with processing applications. Many banks initially required PPP applicants to be existing customers who had business-style banking arrangements, something that many gig economy workers lack.
The Treasury Department released guidance for financial institutions to process applications from independent contractors just 48 hours before the program ran out of money on Thursday.
The PPP sits in limbo after Republicans and Democrats could not agree on a deal that would have given the program an additional $250 billion.
“Before many can even get into their state’s [unemployment insurance] website or get a stimulus check in the mail, #PPP approved $339 billion to cover paychecks for MILLIONS of workers IN JUST 12 DAYS,’ Rubio tweeted. “Yet somehow the most bipartisan & successful part of CARES Act is now a hostage in a game of chicken.”
One in six workers in the U.S. count as gig workers under the criteria used by the ADP Research Institute, which is based on tax returns.
Miami Democratic Rep. Debbie Mucarsel-Powell said Congress anticipated “a huge surge” in unemployment applications from independent contractors and gig economy workers once the bill passed. She’s frustrated that Florida isn’t quickly complying with federal law.
“This was a bipartisan effort. We anticipated there would be a huge surge,” Mucarsel-Powell said. “Independent contractors are being denied benefits. Independent contractors are covered under the benefit that we appropriated. It’s time to stop pointing fingers. It’s time for the governor to take on this leadership role he was given in 2018.”