There are certainly benefits to being self-employed, like the ability to set your own hours, work from wherever you please, and enjoy the flexibility that salaried workers often aren't privy to. But there's a downside to self-employment as well, namely the lack of a steady paycheck, no paid time off, and an inability to capitalize on some of the benefits salaried folks are entitled to, like unemployment insurance.
The latter is a big one, because unemployment benefits can serve as a lifeline when workers lose their jobs and need money to pay their bills. Normally, self-employed individuals aren't privy to unemployment benefits, so if you're a freelance contractor for two main clients and they both drop you the same week, you're out of luck. But thanks to the $2 trillion COVID-19 relief package that was just approved, self-employed workers might have the option to collect unemployment benefits if their income has been impacted by the ongoing crisis.
A lifeline for the self-employed
Many self-employed people have seen their income take a turn for the worse in the past few weeks. Some of the hardest-hit workers include performing artists, aesthetic service providers, event planners, travel agents, and rideshare drivers. In a nutshell, any freelance job that can't be performed remotely is probably impacted, and the same holds true for those whose work involves planning trips or gatherings that are currently banned or ill advised. But thankfully, unemployed workers aren't being left to fend for themselves during the ongoing crisis.
If your income has been slashed by COVID-19 and you're self-employed, you can file for unemployment benefits in your state. You'll generally be entitled to $600 per week (which is the amount all unemployment benefits are being padded by), plus half of the average unemployment benefit in your state. To qualify for benefits, though, you'll need to prove that you've lost work due to the pandemic -- whether because you can't safely perform your duties or you're stuck in quarantine. You'll also be required to submit information related to your income, which might require you to comb through your records if you don't already have those details easily accessible.
But filing for benefits might not go smoothly
The fact that unemployment benefits are being extended to self-employed workers is a good thing, but as of earlier this week, many workers in this category were struggling to sign up for them. Some state filing systems have been asking applicants to submit a recent W-2 tax form -- a form self-employed workers don't get -- thereby causing a holdup. And given that many states' online systems are overloaded to begin with, you might find that the process of applying for unemployment benefits is surprisingly challenging.
But don't give up. If your income has taken a hit due to COVID-19, you deserve all the relief you can get -- even if it means exercising an abundance of patience as you navigate a process that can be daunting for salaried and unemployed workers alike.