After three months of being locked down (and often locked out of driving), drivers are relieved to see COVID-19 restrictions loosening up. Maybe you’re one of the drivers who has continued driving and/or delivering all along, and if so, hats off to you. Because you’ve stayed out there, you probably won’t notice the coming changes with unemployment.
If, on the other hand, you’ve been off work and collecting unemployment compensation, you’re most likely wondering what comes next.
You have a lot to think about. If you go out to drive, you might make too much money to keep collecting unemployment. If you continue to stay off the road and collect unemployment (assuming you still can), you might be missing out on even more money from driving.
For now, you’re stuck wondering:
To drive or not to drive? To borrow a poignant line from a great bard of old … that is the question.
Much will depend on your personal situation. If businesses are opening up in your town, and you have the appropriate safety measures in place, you might be ready to venture out. Or you may prefer to continue staying home, either because you’re wary of contracting the virus, or because you’re still in the middle of a near-total lockdown and are unable to drive.
If you need unemployment, it’s still there to collect, along with that sweet $600 per week add-on from the feds (for now). After another few weeks, though, our choices as drivers could be cut back substantially. While the provisions for independent contractors to collect unemployment benefits will continue through the end of the year, the extra subsidy is different. That’s coming to an end.
On July 31, 2020, the provision of the CARES Act that provides a supplemental $600 per week from the federal government for workers (including drivers and other gig workers) who are also collecting state unemployment will expire.
When the CARES Act was signed into law in late March, it was like four months’ of “extra” money was being provided as a tradeoff for being unable to work. It has, indeed, been a godsend to many drivers.
As the July 31st deadline approaches, however, Congress is taking note of just how much it costs to subsidize this program. A particular point of contention is the extra $600 for those who are unemployed, with a fair amount of grumbling about people earning more while collecting unemployment than they earned while working. Those grumblings continue today, and often show up in news stories.
No one knows for sure whether the supplemental $600 will be extended past July 31st, but it’s unlikely. At the very least, requirements for filing claims are becoming stricter, and it’s looking more and more like the extra payment from the feds will end on the scheduled date.
Is it safe, and is it profitable, for you to go back to work now?If not, will you still be able to get state unemployment compensation? What will happen when the supplemental PUA program expires? Should you go back to work now, or remain idle and keep filing your claims?
We’ll look at those questions in this post, and talk about:
- Why the $600/week unemployment boost is ending on July 31st
- Whether the $600/week unemployment boost may get extended
- What conditions drivers need to meet to continue to receive unemployment compensation
- What drivers should do if they can’t go back to driving
- How drivers can protect themselves, physically and financially, if they go back to work
- How drivers can ensure they are earning as much as possible
Let’s take these one by one.
Why is the $600/week boost ending on July 31st?
There’s a debate brewing in Washington, D.C. about whether the economy will need another stimulus this summer, so you can bet that $600 weekly unemployment subsidy is going to be up in the air—and likely a target.
There’s evidence nationwide that people collecting employment and the $600 subsidy are, in fact, receiving more money than they did while working. In fact, according to a May 2020 study conducted by the University of Chicago’s Becker Friedman Institute for Economics, 67% of jobless workers are collecting more in unemployment than they earned while working—and one in five workers is receiving at least double what they earned while employed.
This is why the government has a problem on its hands.
It will be very hard to push people back out into the workplace when they’re getting extra money without a whole lot of effort. Knowing this, the powers that be are already putting together plans for cutting off our supply.
Larry Kudlow, lead economic advisor for the Trump administration, said in a June 14, 2020 appearance on CNN’s State of the Union that the $600 per week payment was a “disincentive to work.” Kudlow was clear that the supplement would no longer be part of the picture after late July.
Although his voice is loud and strong, Kudlow isn’t the only one with an opinion on this topic. This is an election year, and legislative leaders of both political persuasions are speaking out. Some believe the economy is too fragile now for Congress to end the extra income support, especially with many people dependent on the benefits for their very survival.
Here are some ideas that are being sent up as trial balloons:
- Eliminate the $600 payment
- Extend the $600 payment (maybe until after the November election)
- Lower the payment to $400 or $200
- Raise the minimum income to qualify for benefits
- Tie the benefits to general economic conditions, making them available on an as-needed basis
- Give workers a “back to work bonus” for returning to their jobs
There’s obviously a battle brewing between the usual factions, and there’s no way to know what, if anything, will happen when the original income supplement expires on July 31st.
In any case, there’s change in the air. One case in point will give you a feel for what is beginning to happen.
Possible conditions to keep receiving unemployment benefits
For lots of drivers, collecting unemployment has been pretty straightforward. Everyone was affected by COVID-19 when the pandemic first broke out. It was hard, even impossible, to get enough work to sustain the level of income we needed to make a living.
We were allowed by our states to apply for unemployment, even if we were simply suffering from a marked reduction in business. That meant we got the extra $600 per week as well.
Now, as more states allow businesses to reopen, rideshare is picking up and delivery is growing even more popular.
Sure there will still be risks, but drivers won’t be the only ones taking them. Consider the gym workers, hair stylists, bus drivers, retail and food workers, and others who’ve either been taking risks all along, or who are potentially exposed to the virus now, as states reopen.
Independent contractors in Pennsylvania got a surprise this past week when they went to file their weekly claims.
A new message greeted applicants, stating that the federal government had placed new requirements for qualifying for PUA. Here they are, straight from Pennsylvania’s PUA portal.
Whoops! What happened to that condition we had until now, “There is not enough work available?” It seems to have disappeared. The announcement email read that if an applicant didn’t meet one of these requirements, they were no longer eligible to file a claim, period.
Once reality set in, the bottom line became apparent: In Pennsylvania, drivers who are not absolutely and directly affected by COVID-19 are no longer able to file weekly claims.
To be fair, the conditions listed in the announcement are the exact words in the CARES Act.
When PUA first became available, apparently Pennsylvania (and probably some other states) added inviting words for gig workers whose work was severely reduced. Now, the feds have stepped in to get the states to tighten the rules.
You’ll have to check with your state to determine whether you’re still eligible to collect unemployment. If not… well, that’s a tough position to be in. If there’s more business around, and you’re okay with being exposed to the general public, you can go back to driving. But if your anxiety is greater than your desire to drive, or there’s not enough business, what should you do?
If you can’t go back to driving …
On top of your angst, and the possibility that not enough businesses are open for you to generate work where you live, there are other reasons you might not be able to drive, and would still want to collect unemployment compensation. If one of them is on the list of requirements from the CARES Act, you’ll be fine, at least until the end of July.
After that, you may be able to earn some money and still collect unemployment from your state. The CARES act provides for state PUA payments through December 31, 2020. It will depend on your state’s laws how much money you can make while collecting unemployment, or if it’s allowed for you to make any money at all. Read more to learn, can drivers work and collect unemployment.
If you’re unable to return to driving for other reasons, like your car isn’t available, or you have a disabling illness or injury, you probably won’t get much help from your local unemployment office.
If you truly can’t get enough work to sustain yourself due to the way your state economy has shut down, you may be able to appeal.
Don’t be shy about filing an appeal if you can’t find enough work. Just make sure you collect enough documentation to prove it.
You might get unemployment reinstated, or you might also get paid for the weeks you spend disputing the state office’s determination. In any event, if you’re being locked out of filing, and still can’t drive to make a living, and you need the money, making a case for why you should still be getting unemployment compensation makes good sense.
Let’s face it, though … for most of us who are faced with new requirements, it will be “back to work…”
How to protect yourself, physically and financially, if you go back to work
Remember this: That dastardly virus hasn’t gone away and there’s still danger out there.
Most people who ride in your car are going to be acutely aware of then. Then there will be those stubborn rogue riders who won’t even put on a mask. Learn how you can protect yourself as a driver.
You don’t want to leave yourself vulnerable (either physically or financially) to anything from catching the virus to being sued by a rider who gets COVID-19 and swears the infection came from you. Here are some suggestions for protecting your interests.
- Follow all safety procedures: Sanitize your car, in light of COVID-19 wear a mask to protect yourself, and sanitize your hands.
- Check yourself for symptoms, as often as possible.
- Kindly, but firmly, insist that customers only sit in the back seat—no exceptions.
- Be persuasive about getting riders to wear masks and keep them on.
- Invest in a dashcam, which can protect you if you get into disputes with resistant riders and end up in trouble with your platform.
- Be friendly, courteous, and assertive about enforcing all safety-related policies.
In addition to these measures, we highly recommend you multiply your chances for success by creating a hybrid gig business by driving both rideshare and delivery.
This will help you through lulls in rider traffic, and it can also permit you to limit contact, if your anxiety levels begin to rise. It’s easier to leave a bag on a porch than it is to share your car with a coughing, feverish rider for 30 minutes or more.
Hopefully, we’ll all be back to normal soon, and drivers won’t need to worry about getting unemployment compensation … but we’re not there quite yet.
Ways you can improve your earnings
Remember that the CARES Act, as welcome as it was when lawmakers were gushing about it in front of TV cameras, is TEMPORARY. After it expires, most drivers will be back to being independent contractors who are NOT eligible for unemployment compensation if they lose their jobs.
Whether you’re collecting under the CARES Act, or you’re about to be cut loose, here are some ways you can ensure that you get what you deserve. We’ve included links to some articles you may want to read to get more detailed information.
- Take advantage of the programs for as long as you qualify and can’t go back to work.
- Be brutally honest in all your claims—there are armies of minions just dying to catch you in a fraud-related trap.
- Be ready to contest any denials for compensation that you believe to be unfair.
- Get involved with driver groups who are pushing for better rideshare wages and working to push government authorities to consider the issues of classification of drivers as employees.
- Continue to protect yourself by diversifying your options for getting more income because the food delivery boom may not last forever.
Remember, Gridwise is the ultimate rideshare and delivery assistant. You can track your miles, analyze your earnings, and get up-to-the-moment information on events and weather in your town. On top of that, there’s a constantly growing library of driver-friendly articles on our blog, and even more entertaining information and commentary on J and Brandon’s podcast.
Be sure to check the Perks tab on the app for all these awesome features, plus amazing discounts and deals for drivers. Wait—did you say you don’t have the app yet? Well, get smart and get it, NOW.
