Uber and Lyft Drivers Face Hurdles to Stimulus Bill Benefits
Shortly after the Senate approved a huge stimulus bill in late March that made gig workers and other contractors eligible for unemployment assistance during the coronavirus pandemic, Uber’s chief executive, Dara Khosrowshahi, rejoiced on Twitter.
“Thanks to the Senate for supporting 1.3M @Uber drivers & delivery people,” he wrote. “Many independent workers are on the frontlines; all deserve support.”
But a variety of obstacles — including the difficulty of bringing decades-old state unemployment systems up to speed and strict eligibility guidelines from the Labor Department — have left most drivers unable to take advantage so far.
And many states have no experience with accommodating such workers.
Lori Simmons, until recently a full-time Uber and Lyft driver in Chicago, said that when she applied for unemployment benefits in mid-March, before the federal legislation passed, the claims representative seemed unacquainted with the status of gig workers.
“She had no idea,” said Ms. Simmons, who has helped to organize Uber and Lyft drivers. “She was like, ‘Oh, ride-share drivers going to be calling?’ I was like, ‘Yeah, they’re going to be calling.’ She put me on hold a bunch of times, asking her supervisor what to say.” Ms. Simmons managed to submit an application, but her case has yet to be resolved.
While Illinois and many other states may be able to award drivers benefits under the recent federal legislation, which covers the self-employed and other workers ineligible for traditional unemployment benefits, few states appear ready to process applications from gig workers, and some are turning them away.
A March 31 notice on the website of the Illinois agency overseeing benefits said it would “provide information about how to apply for this benefit as soon as it is finalized.” The notice added: “Please do not apply at this time.”
Uber later acknowledged in an email to drivers that it would take weeks before states could start processing claims and even longer before drivers received assistance.
Lawmakers in Washington are imploring the Labor Department to help states distribute the new unemployment benefit more quickly.
“We are already hearing reports from unemployment officials from around the country that it will likely take weeks to stand up a new program and disburse benefits to these newly eligible workers,” Senator Mark Warner, a Virginia Democrat, wrote to Labor Secretary Eugene Scalia last week.
Mr. Warner urged the department to create tools, like a common online claims-processing system, so that states didn’t have to create their own infrastructure.
Critics have also expressed concern that the department may be excluding workers who should be able to receive the new benefit, citing guidance on eligibility that the department issued over the weekend.
“I’m deeply concerned that the Trump administration’s guidance to states on administering expanded unemployment insurance weakens the program,” Senator Ron Wyden, an Oregon Democrat, said in a statement on Monday. “It’s critical that workers who are unemployed through no fault of their own don’t fall through the cracks. Congress intended for these workers to be covered.”
In its guidance, the department appeared to leave out gig workers who could theoretically choose to work on any given day but have decided not to bother because so few passengers are requesting rides. It also appeared to exclude certain workers — such as older ones — who choose not to work because they are at a high risk of suffering serious health complications or dying from the coronavirus, although it indicated that those with compromised immune systems would be eligible.
And while the guidance allows the self-employed to claim benefits if they are unable to work because of child care needs while schools are closed, it implies that the benefits could expire once the school year ends.
A Labor Department representative said the situations laid out in its recent guidance “are not exhaustive, and we expect many ride-share workers to be eligible.” Uber and Lyft also said they expected many drivers to qualify.
Andrew Stettner, an expert on unemployment insurance at the Century Foundation, a liberal think tank, said part of the problem was language inserted late in the legislative process that required the Labor Department to use a longstanding program, Disaster Unemployment Assistance, as a model.
Under that earlier program, which helps states make benefits available to the self-employed after events like hurricanes, workers indirectly affected by a disaster — like a supplier of baked goods to restaurants that have been destroyed — often have difficulty getting benefits. And the process typically requires filing significant amounts of paperwork in a relatively short time.
“The program is a false promise,” Mr. Stettner said of the disaster assistance program. “It is undersubscribed.”
Notwithstanding the more restrictive legislative language, experts said, the Labor Department could have broadened its framework to cover any self-employed person who saw work dry up because of the pandemic — whether an Uber driver or a web-marketing consultant whose clients are small businesses. It chose not to.
The rules were adapted “pretty much wholesale” from the disaster benefits program, said Maurice Emsellem, an expert on unemployment insurance at the National Employment Law Project, a worker advocacy group. “They have all the leeway in the world to waive those regulations if they wanted to. It’s their regulations.”
Mr. Emsellem argued that states could still interpret the law more broadly and encouraged them to do so.
Even if the Labor Department and state agencies allowed a broader group of independent contractors to claim the new unemployment benefit, tens of thousands of gig workers could remain ineligible. That’s because only workers who don’t qualify for standard unemployment benefits are able to claim the new contractor benefits. And several states, including California and New York, have found gig workers like Uber and Lyft drivers to be eligible for traditional benefits.
But it is difficult for gig workers to claim traditional benefits in these states because companies like Uber and Lyft have yet to report workers’ income information to state agencies, and the states have not forced them to do so. As a result, it typically takes drivers several months to claim traditional benefits in states like New York. Many give up.
An Uber spokeswoman said the company had agreed to provide this data and was working with New York to determine a practical format. Nicole Salk, senior staff attorney at Legal Services NYC, who has represented drivers seeking unemployment benefits, said she had detected no progress in the ability to file.