Unemployment Insurance for Sole Proprietors?

B

Benjobe

Well-known member
Does anyone have any experience with filing for unemployment insurance when you're a sole proprietor of a video production business?

I'm such a sole proprietor, a one-man band of video production (for big projects I'll hire 2nd shooters, PAs, and editors) I usually work alone on small projects. Lately all my usual clients are struggling with the shelter-at-home situation and my business has dried up. It'd be nice if I could file for unemployment insurance just like everyone else who lost their jobs. But I'm not sure how to go about it. I was hoping someone here would have experience or know someone who has done it.

Any informational stories out there?
 
Under any normal circumstances, folks like us do not qualify for UI because, as freelancers, independent contractors, gig workers, or sole proprietors, we don’t pay into it through any payroll taxes/withholdings.

However, the CARE Act opened up UI benefits for all of us including an extra $600/week for the run of the benefit coverage. Just know that state labor offices are overrun and overwhelmed because the claims have spiked so high. You may find the website slow, buggy, or prone to time out or crash. But keep at it and you’ll get there. It also may take up to three weeks for your claim to be approved and payments to begin.

You’ll also have to start with weekly certification once you apply. That means you log into the website once a week and answer several questions, truthfully, pertaining to any work payments you may have received, jobs you’ve applied for, and job offers you may have turned down. Typically, your state will require you to apply for three jobs a week in order to maintain benefits, but that requirement has been deferred for the time being because... really, we’re all being told to stay home, and they get that.

It’s not ideal. Applying here in TN has been a learning experience because I’ve never had to file for unemployment in my life, but with the production industry at a standstill it’s about the only recourse I have to keep up with bills for the time being. Unless I happen to win the lottery.*

*I guess I should go buy a lottery ticket if that’s my backup plan...
 
Since you're in California, check out this article (and the link therein) from last night about state CARES act stuff:

California independent contractors can apply for unemployment in 2 weeks, top labor official says

Independent contractors in California will be able to start applying for federally funded unemployment benefits in two weeks and receive payments within 24 to 48 hours, state Labor Secretary Julie Su said in a letter released Tuesday.

The benefits, called Pandemic Unemployment Assistance, are coming from the federal government under the Cares Act. People who are not eligible for regular state unemployment benefits — because they are self-employed, have run out of regular benefits or didn’t work enough to get them — can apply for the new pandemic benefits if they have become partially or fully unemployed because of the coronavirus. Applicants will be able to “self-certify” that they meet the “COVID-19-related criteria” for assistance, Su wrote.

Rest of the article:
https://www.sfchronicle.com/busines...endent-contractors-can-apply-for-15200513.php

And Labor Secretary Julie Su's letter:
https://www.labor.ca.gov/wp-content/uploads/2020/04/Labor-Secretary-Letter-04.14.20.pdf
 
I’ve been told that because UI is done at the state level, that
you must apply through your state’s normal unemployment
insurance site or number. Which is fine but most states
are not set up to accept sole proprietors. So even though they
are getting money from the feds, they have to redo their
‘systems’ so they can let us apply. In my state, I have been
told it will be April 20th (at the earliest) before self employed
people can even apply. By the time they get to us, good chance
the money will have run out.
 
Under normal circumstances, we don't get anything. But like Alex said, the CARE Act has changed that. BUT most states unemployment sites are not set up to deal with us. I started applying last week and I do have some W2 "employers" that show up, including a regular client and my own company, but my state is supposed to have the application process adapted to "us" in the next 10 days. I'm probably going to wait until they are set-up for us before I finish, because I think if they go by just my W2 income, I won't get anywhere close to what I will once they can process freelancers.

A story just ran on the news a few minutes ago on unemployment and they said typically there are about 11K people per month here applying for unemployment. Today alone there were 25,000.
 
alaskacameradude said:
I’ve been told that because UI is done at the state level, that
you must apply through your state’s normal unemployment
insurance site or number. Which is fine but most states
are not set up to accept sole proprietors. So even though they
are getting money from the feds, they have to redo their
‘systems’ so they can let us apply. In my state, I have been
told it will be April 20th (at the earliest) before self employed
people can even apply. By the time they get to us, good chance
the money will have run out.
Click to expand...

I think you're confusing unemployment benefits with the business (forgivable)loans that are from a "set pot of money".
 
Run&Gun said:
I think you're confusing unemployment benefits with the business (forgivable)loans that are from a "set pot of money".
Click to expand...

So what I have been told is that the CARES Act
include Federal money to give the unemployed
($600 per week above what they would normally
get.) However, much like the loans you refer
to, there is a set amount of money allocated
to this, so the money will eventually run out.
And there have been way more unemployment
claims than anticipated in my state at least and I
think that is true everywhere. Now the loans
you are talking about have already run out
(as of Wednesday the 15th.)
I can’t even apply for unemployment for another
5 days which ensures I will be behind everyone
who applies between now and then. Maybe there
will be money left and I will qualify but I’m
not going to bet on it.
 
I heard that no one anywhere has yet been able to claim their $600/month from the PPP, and guidance has been poor so it's not clear how it's going to work anywhere, either. In NY at least, you file for Unemployment the regular way you would if you had a normal job, and after that (at some point) you get more questions asked and maybe it kicks in, however it's implemented in your state.
 
I applied for UI on California's EDD websites as most of my colleagues have. I have filed a claim, and yesterday updated my certified weeks as Alex alludes to. Then I discovered the
Pandemic site yesterday that Jim links to that seems more suited to us 1099 ICs, self employed and small business owners but we cannot even apply until April 28th?!?

So I have feeling I will be denied benefits for the all of the on-line stuff I have already spent hours navigating and filling out. I will probably have to start all over again at the
new website on the 28th and in the meantime, I won't receive any money for that I have already applied for. I am curious though that if EDD actually does pay me and doesn't
turn down my claim on the normal site, that will be interesting. I was told that W2 wages only "count" for six quarters and it's been quite a few years since I worked a W2 job.

We shall see what the heck happens. Money is tight and getting tighter. I have savings but not six months worth since this year pre-Pandemic was off to a really slow, terrible start with work.

For those of you in the same boat, prayers and postive thoughts. I am not very keen to "taking charity" or relying on the state to do anything for me but when the state has completely negated
my ability to work by making leaving my house almost illegal, what else can you do but hope the state will deliver some much needed funds for you to financially survive? It sucks but short of
breaking the law/orders, not much choice.
 
As part of the CARES Act, the federal government set aside money for freelancers and self employed under a program called Pandemic Unemployment Assistance (PUA). It is not a particularly descriptive acronym, but that is the program we are looking for when we try to apply for unemployment. The state governments are administering the program, though. Here in MA, they are trying create a website for applying and it won't be available until the end of the month. Until then, we have to wait. Every state has their own process.

If you had a W2 job of some sort, you could try to apply for unemployment through the regular unemployment insurance (UI) channels, but I doubt it would work. I think the company would have to file for you as being furloughed from work. I was tempted to try to get one of my W2's to "fire" me, but if they aren't giving out the $600 Federal Pandemic Unemployment Compensation (FPUC) then it wouldn't add up to much. FPUC is another one of those not particularly descriptive acronyms.
 
This is all very helpful information. Thank you for sharing it. Jim's links were especially helpful since I'm in CA too.

I've been working since I was 13yo, never been unemployed for longer than two weeks, just turned 40 this year, and I've never applied for unemployment insurance in my life. I guess there's a first time for everything.

Since I've been running my own business for 12 years I don't have a prior work history that would allow for traditional unemployment insurance, but this PUA sounds like it's made for people like me. I found the following on the California Labor website:

"Up to 39 weeks of benefits starting with weeks of unemployment beginning February 2, 2020, through the week ending December 26, 2020*, depending on when you became directly impacted by the pandemic.

An additional $600 to each PUA weekly benefit amount you may be eligible to receive, as part of the separate CARES Act Pandemic Additional Compensation program. Only the weeks of a claim between March 29 and July 25* are eligible for the extra $600 payments."

https://edd.ca.gov/about_edd/coronavirus-2019/pandemic-unemployment-assistance.htm

So it looks like I'll be able to apply for PUA on April 28th.

If anyone else has any further advice or experience with working these programs then please share it. Navigating government bureaucracy intimidates me, but it's probably easier than it sounds. Hearing stories of others' success is very motivating. Thanks again for everyone who shared.
 
mothmachine said:
I heard that no one anywhere has yet been able to claim their $600/month from the PPP, and guidance has been poor so it's not clear how it's going to work anywhere, either. In NY at least, you file for Unemployment the regular way you would if you had a normal job, and after that (at some point) you get more questions asked and maybe it kicks in, however it's implemented in your state.
Click to expand...

I received my first $600 last night. That's in California. It came in addition to and separately from the regular unemployment. I'm getting just $63 for the regular w2 unemployment. 1099's account for 3/4 of my income, but you can't properly apply for 1099 unemployment until the 28th in CA.
 
ozmorphasis said:
I received my first $600 last night. That's in California. It came in addition to and separately from the regular unemployment. I'm getting just $63 for the regular w2 unemployment. 1099's account for 3/4 of my income, but you can't properly apply for 1099 unemployment until the 28th in CA.
Click to expand...

Do you try again when that happens? Or are you locked in?
 
ozmorphasis said:
I received my first $600 last night. That's in California. It came in addition to and separately from the regular unemployment. I'm getting just $63 for the regular w2 unemployment. 1099's account for 3/4 of my income, but you can't properly apply for 1099 unemployment until the 28th in CA.
Click to expand...
Congrats! When did you apply?
 
MA got their PUA online last week. I signed in and learned I did not qualify because I had W2 employers that paid me over $5100 for the year. Therefore, I first had to apply for regular unemployment even though I haven't technically been laid off from any of my W2 employers since I am an "on call" employee rather than part time. I applied for unemployment through the UI, but I doubt I will qualify. One of my over $5100 employers, Harvard University, is actually paying me some small amount of money based on an average amount they paid me per week in the first three months of the year. I think Harvard thinks I am supposed to be grateful, but I am guessing it is going to be the sticking point that causes me to not qualify for any of the money that the government is giving out.
 
being a video freelancer is one of the most difficult thing to define. I saw an option for dog stylist from a drop down list, but couldn't seem to find video freelance. there camera op for movies and television. but I haven't cam op'ed for a movie in sometime. it certainly isn't my day job.
 
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cpreston said:
One of my over $5100 employers, Harvard University, is actually paying me some small amount of money based on an average amount they paid me per week in the first three months of the year. I think Harvard thinks I am supposed to be grateful, but I am guessing it is going to be the sticking point that causes me to not qualify for any of the money that the government is giving out.
Click to expand...

Better tell them to defer your pay until August if it keeps you from getting PUA!
 
James0b57 said:
being a video freelancer is one of the most difficult thing to define. I saw an option for dog stylist from a drop down list, but couldn't seem to find video freelance. there camera op for movies and television. but I haven't cam op'ed for a movie in sometime. it certainly isn't my day job.
Click to expand...

I think you'll be fine saying that. Hell, you'd probably be fine calling yourself a photographer. The worst that will happen is they give you a call to clarify.
 
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