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The bureaucratic hook leaves thousands of gig workers out of aid

When the COVID-19 pandemic wiped out almost all of Daniel Herman’s upcoming work, he hoped he would get help from the federal government.

30-year-old Herman, a videographer and musician from Boulder, Colorado, believed he would qualify for Pandemic Unemployment Assistance (PUA), a new federal aid program for self-employed gig workers and independent contractors. The program should support freelancers like Herman who are not entitled to traditional unemployment benefits.

But four months later, a bureaucratic glitch excluded Herman from the program. The problem is related to one of the jobs Herman had last year when he made sound for live shows in a cafe. The store put him on the payroll instead of paying him as a freelancer. Although Herman only earned about $ 2,600 for work, a small portion of his total income for the year, it was enough to put him in Colorado̵

7;s traditional unemployment system and to exclude him from receiving unemployment pandemic support.

“It’s like this giant carrot dangles from my face, but it’s a few inches away from me and I can’t reach it,” said Herman. “This bill was written to support gig workers, but that just seems like a big oversight.”

Legal experts, policy analysts and entertainment executives believe that thousands of freelancers and gig workers are in a similar position and are excluded from the PUA program because they have earned a small portion of traditional wages. Snafu has resulted in many of them receiving far fewer weekly benefits than PUA.

For example, Herman’s unemployment benefit is based solely on the money he earned in the café, without counting the nearly $ 40,000 he earned through other performances, such as playing the piano and performing live concerts. Instead of at least $ 223 a week, Colorado’s minimum benefit for gig workers under PUA, Herman only gets $ 43. (Herman will also receive a weekly grant of $ 600 for the unemployed, but the federal grant program is scheduled to end this month.)

“This is a really big problem that not enough people pay enough attention,” said Michele Evermore, senior researcher and political scientist at the National Employment Law Project, an advocacy group for labor rights, about the challenge for gig workers who earn mixed income.

The problem stems from the creation of the PUA program in the Coronavirus Aid, Relief and Economic Security Act in March. The law states that a person may be entitled to traditional state unemployment benefits (based on the income specified on W-2 tax forms) or PUA (based on the income specified on 1099 tax forms), but not both . This leaves an unintended gap for workers like Herman, who had both types of income last year.

“It will be a challenge to fix this,” said Evermore, adding that one solution would be for Congress to give workers a choice of whether to receive PUA or traditional unemployment benefits. “People really miss it.”

Many of the workers affected are actors, musicians and writers, so more than three dozen entertainment industry organizations, including the Screen Actors Guild-American Federation of Television and Radio Artists, have pushed for change. Hundreds of workers have joined Facebook groups to raise awareness and an online petition has collected more than 10,000 signatures.

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The subject has also caught the attention of lawmakers, including MP Adam Schiff, D-Calif., Who along with 20 other members of the House of Representatives sent a letter to the congressional leaders on May 8 stating that he was part of the next COVID -19 aid package requested a solution.

However, it is unclear whether this will be a priority when lawmakers return to Washington this week. Congress is also debating other relief efforts, including whether to extend the $ 600 weekly that many workers get in addition to their unemployment benefits. This service is due to end by July 31. The impending deadline – along with the expiry of other safety measures in many states, such as eviction moratoriums, increases the urgency of a legislative correction to ensure that gig workers get the benefits they deserve, advocates say.

“This money is the difference between being able to pay rent or not, getting groceries or not, feeding your family or not – it’s a really big deal,” said Jordan Bromley, an entertainment lawyer in Los Angeles on the board of music is Artists Coalition, an artist rights group.

Based on union membership, Bromley estimated that more than 100,000 California musicians could be excluded from PUA benefits because of the different incomes that disqualify them.

“The music industry was one of the first to stop and we’ll be the last to start,” he said. “We’re looking to the summer of 2021 before the industry gets fully involved again, and that’s a whole source of income for almost all of those artists who are gone. So these benefits are their only opportunity to relieve.”

When the music industry closed in March, Andrea Black, 41, of Maine, lost all of her work as a tour bus driver for bands. She applied for unemployment benefits and assumed that the amount she received would be based on all the jobs she had as an independent contractor the previous year. However, it turned out that one of the bands she worked for paid her about $ 10,000 via a W-2, which was enough to exclude her from PUA.

Andrea Black, 41, from Maine, a self-employed bus driver for touring bands, was excluded from the Pandemic Unemployment Assistance program.Andrea Black

Instead, Black Maine’s received traditional unemployment insurance, which she estimated was $ 100 less a week than that she would have received from PUA. It also only took 13 weeks, unlike PUA, which offers 39 weeks of benefits.

“This is a huge amount of money for someone like me who has no idea when he can go back to work,” said Black, whose unemployment benefit ended last week. “It is a strange feeling to wake up every day and calculate how long you can survive.”

Each state sets its own minimum amount that a W-2 must earn to be eligible for traditional unemployment benefits. Proponents and policy experts say that minimum requirements have disqualified people for PUA in almost all states.

Anthony DiNardo, 24, was expelled from PUA in Illinois for a single job. DiNardo, a graduate of North Park University in Chicago, helped college through training in baseball camps and running Little League games as an independent contractor. He also worked in an Amazon warehouse for several weeks last year and made a W-2 profit of around $ 1,900. The Amazon job brought him just over the $ 1,600 threshold in Illinois to receive traditional unemployment benefits – which meant he wasn’t eligible for PUA.

Anthony DiNardo, 24, was excluded from the PUA program in Illinois.Anthony DiNardo

“It just seems a lot more complicated than it has to be,” said DiNardo, who received $ 51 a week in traditional unemployment last month, less than the $ 198 minimum week that PUA offers in Illinois .

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For Herman, the road to financial support was long and frustrating.

He applied for it in late April, but did not receive unemployment benefits until June. By then, Herman had already sold three of the four cameras he had used as a videographer to pay his rent, bills, and groceries.

“It was like a Catch-22 because I wouldn’t have exactly what I needed if I could work again,” said Herman.

Daniel Herman, 30, in his back yard in Boulder, Colorado. Rachel Woolf / for NBC News

With the lonely camera he’s left, he still hopes to find some video footage of customers outside of the music industry. He is grateful for the unemployment benefits he received, but he is unsure how long his savings will last if the $ 600 scholarship is cut and he only gets his basic unemployment benefit of $ 43 a week.

He hopes that lawmakers will not forget those who remain unemployed and do not get the help they need.

“There’s a rush to get back to normal,” said Herman. “But I hope they won’t overlook the problems that weren’t addressed at all.”

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