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‘This will financially cripple us’: How Pandemic Unemployment Assistance falls short

Unable to work, turned down for loans, and denied unemployment, freelancers affected by the coronavirus pandemic are still waiting for relief.

‘This will financially cripple us’: How Pandemic Unemployment Assistance falls short
[Photo: Gift Habeshaw/Unsplash; Sahand Hoseini/Unsplash]

When fitness trainer Lindsey Van Etten was forced to close down her Ohio gym in the early days of the COVID-19 pandemic, the promise of government relief was one small bright spot in an otherwise dire situation.

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Then, one by one, the options fell through. She applied for a disaster relief loan with the Small Business Administration (SBA) but heard no response. The separate Paycheck Protection Program also looked appealing, but not even her banker could successfully help her through the convoluted application process.

Finally, there was one last hope: The Pandemic Unemployment Assistance program, or PUA, which extends jobless benefits to people who not otherwise qualify. That category of workers supposedly includes freelancers and the self-employed, people such as Van Etten, but even several weeks after businesses were forced to close, Ohio still hasn’t fully updated its unemployment website to accommodate self-employed workers.

And now, like so many other self-employed people who were forced out of work because of COVID-19, Van Etten is at the end of her rope. “It’s so unsettling and discouraging,” she says. “Where do businesses go from here?”

The various relief programs established by the federal government in the wake of the coronavirus crisis lay bare a searing inequality among American business owners and the self-employed. As larger, well-connected companies scooped up billions in small business loans, sole proprietors and the self-employed were left jumping through endless hoops, ghosted by agencies such as the SBA that were too overwhelmed to respond to their queries and turned away by lenders who were too busy helping larger clients.

Although some of the biggest recipients—Ruth’s Chris Steak House and Shake Shack, for instance—have said they will return their loans, many freelancers, self-employed workers, and sole proprietors say that loan money still isn’t trickling down to them.

“I believe all of this assistance is a sham”

In theory, the PUA program could have been a much-needed stopgap for these workers, offering 39 weeks of unemployment benefits available through the end of the year. But implementing the program is left up to individual states, most of which are already stretched to the breaking point by the more than 30 million Americans who have filed for traditional unemployment benefits in the last two months.

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A spokesperson for Ohio’s Department of Job and Family Services said the state launched a preregistration tool for PAU benefits that was used by more than 200,000 Ohioans. It expects a live application to be ready “by the end of the week.” That’s more than a month after the U.S. Department of Labor published guidance for states on how to implement the program.

But even in states where PUA applications are supposedly open, many freelancers say they’re being pushed to the back of the line or cast aside altogether. “I believe all of this assistance is a sham,” says Amy Daugherty, a self-employed real estate worker. She says she was turned down for unemployment benefits in Florida with no explanation. “Nobody is getting any assistance. I take care of my elderly mother, and this will financially cripple us.”

A spokesperson for Florida’s Department of Economic Opportunity referred Fast Company to a fact sheet that lists several reasons why self-employed workers might be deemed ineligible.

At the start of the pandemic, Florida’s legacy unemployment website was widely criticized for being glitchy and outdated. It launched a new one in April, but that one is also drawing complaints. “They have two websites now. Neither seems to work,” said Lyle Polyak, a self-employed worker who has been trying to get some kind of relief since March, when his small printing business in Clearwater was negatively impacted by COVID-19.

According to a recent survey by the Freelancers Union, 84% of union members who had sought government relief have yet to receive a dime. Rafael Espinal, the union’s president, says that freelancers are unequivocally slipping through the cracks.

“These programs have not worked in a timely manner for freelancers,” he says. “Whether it’s the unemployment insurance or the Paycheck Protection Program, either they haven’t qualified because states haven’t been able to update their systems or deal with the high influx of applications, or with something like the loan program, small businesses were prioritized over the self-proprietor, which has put freelancers at a great disadvantage.”

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In the case of the PUA, self-employed workers are only eligible for unemployment if their job loss is a direct result of COVID-19, but it’s not always clear what that means. “This definition leaves out self-employed workers and gig workers losing work because of the sharp general decline in economic activity, if they can’t trace their unemployment to one of these reasons,” noted a recent report from the Century Foundation.

According to a spokesperson for the U.S. Department of Labor, states are supposed to provide applicants with an “appealable written determination” if they are denied PUA, and applicants should appeal through the state if they feel their denial was in error.

What freelancers still need

Espinal, who is a former member of the New York City Council, says the Freelancers Union has focused its attention on advocacy, meeting with state and federal officials to convince them to dedicate more resources to help freelancers navigate relief options and weather the pandemic. He says the next federal stimulus package should include money set aside specifically for these types of workers.

An estimated 57 million Americans worked as a freelancer or performed at least some freelance work last year, according to the latest data from the Freelancers Union and Upwork, with freelance income totaling about $1 trillion. But the patchwork implementation of the PUA has made it clear that these workers aren’t a priority. Several lawmakers have championed expanding benefits to freelancers, but it makes little difference when state-level unemployment websites are only able to serve traditional employees.

Consider Illinois, where PUA applications are supposed to open next Monday. Some self-employed workers who have been waiting for benefits there say there is still the lingering question of how, exactly, the state will determine who qualifies. “This is the proverbial other shoe that is left to drop,” says Patrick Collins, who is part of a small consulting practice in Illinois but is classified as self-employed. “And it’s one that, I suspect, will make a lot of folks feel like all the hoops they’ve jumped through to date were a waste of time.”

As the days of lockdowns stretch into weeks, and weeks into months, time is a luxury that many self-employed workers definitely don’t have. “I want to help save lives by staying home, but what about feeding and sheltering my family?” Van Etten says. “What a mess and disappointment this is.”

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About the author

Christopher Zara is a senior staff news editor for Fast Company and obsessed with media, technology, business, culture, and theater. Before coming to FastCo News, he was a deputy editor at International Business Times, a theater critic for Newsweek, and managing editor of Show Business magazine

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