Gig workers typically don’t qualify for unemployment, but changes made in COVID-19 relief legislation made that possible in 2020, and it has continued into 2021. However, the nature of gig work and payment processes can make it difficult to prove income and open up the program to fraud.
The Workers Lab and Steady have launched The Workers Lab Design Sprint to help assist those gig workers who qualify for unemployment insurance with the use of the Steady App.
“The unemployment system wasn’t designed with gig workers in mind and can’t efficiently deliver unemployment benefits,” said The Workers Lab CEO Adrian Haro. “That’s where The Workers Lab and our partners come in. We’ve applied the Design Sprint to the challenge of getting workers their unemployment benefits because gig workers need this help fast.”
The U.S. Department of Labor (DOL) ruled that under the Pandemic Unemployment Assistance program, “self-employed, independent contractors and others who are unemployed as a direct result of COVID-19, who are not eligible for regular unemployment benefits or extended UI benefits,” could collect unemployment.
According to MarketWatch, jobless fraud in California alone likely topped $2 billion in 2020, and as a result states and the DOL have increased scrutiny of jobless claims for gig workers. This has delayed some claims, leaving workers waiting weeks for their unemployment claims to be processed.
A Steady study found that nearly one-third of hourly workers experiencing a total income loss went at least 16 weeks without receiving unemployment assistance. In its Jan. 21 unemployment claims report, DOL said gig workers filing for unemployment increased 48%.
A Government Accountability Office report in late 2020 found that many states were paying Pandemic Unemployment Assistance claimants minimum amounts rather than what they were eligible for.
Many states are now requiring gig workers and self-employed workers to provide documentation of earnings to qualify for unemployment benefits. Under the original pandemic relief programs, the workers only needed to estimate their earnings to qualify, but at the end of December, the DOL published guidance that workers needed to “provide documentation substantiating employment or self-employment.”
Read: COVID didn’t kill gig economy, the pandemic accelerated it
The Workers Lab has advocated for benefits to be extended to gig workers, but it said while they are eligible for the enhanced $300 benefit, “state agencies are having a hard time administering unemployment benefits to gig workers.” The complication, the group noted, resides in workers that may drive for Uber, Instacart, Postmates or any other service in a single day, necessitating the review of multiple spreadsheets for state agencies.
“As a result, states are incurring huge costs, while deserving workers are left without benefits. This patchwork system increases vulnerabilities to fraud, which further strains state resources,” the group said in a press release.
Steady provides an income intelligence platform for 1099, gig and hourly workers. Through the Design Sprint with The Workers Lab, Steady will assist states in verifying income levels to ensure gig workers can get the unemployment assistance for which they qualify.
Steady has already been used by The Workers Lab to verify workers’ income and identify significant income loss during the pandemic, the companies said. The result has been a distribution of more than $3.2 million in emergency cash grants to workers in need through The Workers Lab’s Innovation Fund.
The Workers Lab works with public, private and nonprofit leaders to test ideas that improve the lives of workers.
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