It’s now been over two weeks since the $600-a-week unemployment boost ran out, leaving thousands of people in much reduced circumstances while jobs are few and a pandemic still rages on. How are drivers making do with a reduction in unemployment payments? Senior RSG contributor Paula Gibbins reached out to drivers to see what the unemployment situation is like for drivers.
Unemployment benefits around the United States are a patchwork of payments. According to CNBC, state aid varies significantly from person to person, and most states pay minimums below $100 a week. Hawaii, for example, pays $5 a week on the low end of benefits. Arizona and Washington, on the other hand, have the highest minimums, just shy of $190 a week.
All this to say, the data we have collected from drivers below depends a lot on factors such as:
- What the driver earned last year
- How the state calculates aid
- What their state allows for unemployment
And more. However, even with states paying out at a variety of amounts, all unemployed drivers have been impacted by the loss of $600-a-week unemployment benefits.
We want to know – how much you are receiving in unemployment in your state? Take our short survey below:
Quick links:
- Need to earn extra money but don’t want to drive rideshare? Check out these gig jobs
- Our top recommendations? Instacart is hiring almost everywhere right now!
- Postmates and DoorDash are also other solid options
- Don’t forget to take our short survey and let us know what you’re making in unemployment benefits here!
Background on Unemployment for Gig Workers
Historically, unemployment benefits have not been available to rideshare drivers because we are hired as independent contractors and are not able to participate in unemployment benefits, partially because we do not have unemployment taken out of our paychecks like regular employees do.
However, since the coronavirus pandemic is affecting all workers in all areas, rideshare drivers and gig workers—really anyone who is self-employed—were included in the CARES Act, allowing those independent contractors to earn unemployment benefits and giving an extra $600 payment that is now no longer available, as of July 31, 2020.
Currently, the Pandemic Unemployment Assistance (PUA) program is in effect from January 27, 2020 to December 31, 2020. In addition, unemployment benefits for everyone who needs to use it is extended an extra 13 weeks after regular unemployment would have ended.
To be clear, just because PUA is available until the end of this year, it does not mean that you will receive benefits for the full time PUA has been available.
For instance, if I stopped driving on March 3, 2020, I would receive PUA benefits until December 1, 2020—this is the standard 39 weeks allowed under the CARE Act for rideshare drivers. I would not continue receiving until the end of the year unless Congress decides to further extend how long benefits are available.
Here’s a handy chart that explains what unemployment insurance benefits look like depending on your situation:
In a nutshell, if you’re a rideshare driver, you can get up to 39 weeks of unemployment insurance benefits, depending on how many weeks are left in the year of the time of the claim. So, if you decide to stop working at the end of August 2020 and start a claim then, you won’t receive extra once the end of the year is here.
Will drivers ever see more unemployment funding? RSG contributor Jay Cradeur shares the latest on our YouTube channel here and below: Unemployment Extension Delayed?
What are Gig Workers Actually Receiving in Unemployment?
I’ll break it down by some of the more well-known states. Keep in mind, these numbers are averages taken from individuals who are self-reporting what they are earning, also without knowing what they earned in the previous year, which is a determining factor in how the earnings are calculated, and not always known if these numbers are before or after taxes are taken out.
One driver from Hawaii stated on our Facebook post: “Hawaii UI depends on 2019 income. Uber and Lyft drivers were denied PUA because the State of Hawaii treats drivers as employees. State of Hawaii is pursuing employer contribution payments that were never paid; another court case.”
So, not every state is playing things out in favor of rideshare drivers. Another posted on Facebook in response to being asked how much they have received in unemployment, “Nothing, apparently you need to have kids/dependents to qualify in Illinois.”
Here are what drivers in some states shared they would be making under the current unemployment benefit calculation:
Since that the extra $600 is no longer coming through weekly, the numbers shown here are not all that impressive. However, several drivers are still choosing not to drive due to the pandemic and collect what they can.
When we asked drivers why they chose not to drive, their answers varied from:
- Not willing to risk their health or the health of a family member
- Market slowdown and reduced rideshare demand
Are More Benefits Heading Our Way?
True, President Trump signed an executive order on Saturday, August 8,2020 that basically says all unemployment recipients will start to receive $400 a week through to December 6, 2020. However, we might not be able to count on that actually happening.
One part that I found interesting states:
“In exercising this authority, the Secretary, acting through the FEMA Administrator, shall, subject to the limitations above, approve a lost wages assistance program that authorizes the Governor to provide a $400 payment per week, which shall reflect a $300 Federal contribution, to eligible claimants from the week of unemployment ending August 1, 2020.”
This to me sounds like it’s different from the program that states had been using to pay out the extra $600. Plus, the state would have to front $100 per person, presumably using the money given to them from the CARES Act, assuming there is any money left for each state.
On the state of Minnesota’s unemployment insurance website, it mentions the extra $600 payment and how things might change going forward if it were replaced with another program, such as the one spelled out in the executive order. The site states:
“If the program is replaced with a different program, we will not be able to implement it until the United States Department of Labor issues formal guidance and we are able to make any programming changes necessary to meet that guidance.”
It’s also believed that the executive order will be challenged in court because of not expressly being an unemployment insurance program. Plus, with it being a new system to implement, chances are it would take a long time to get up and running.
Basically, the aid to unemployed workers the president signed will likely be smaller than expected, it’s unclear when anyone will see the money, no one knows how long it will last, and no one knows how many workers will even benefit.
My Thoughts
While it would be great to have the benefits extended or to get $400—or whatever number—extra, I don’t really see it coming along this year. Everything is being politicized and it’s all “they” won’t do this or “they” did that.
I really don’t see the other stimulus package being passed unless everything takes a major turn for the worse again. Or, if one does get pushed through, it’ll be a bunch of things that sound good, but don’t actually help the people who are suffering and will just be to get votes.
I can also see both sides of the fence here when it comes to who should receive these benefits. Some people may be taking advantage of the unemployment insurance system by not driving during the pandemic and just earning extra dough.
At the same time, I also feel that many people have a very solid reason for doing it, and if the funding is there, why not take care of yourself and your family and get paid to stay home for now until the health risk goes down a bit more?
It’s been a tough decision in our family. Should the full-time rideshare driver continue earning about $250 in unemployment a week, or risk going out driving and catching COVID-19 and any consequences that come from that? Both my husband and I are in a higher risk category for having asthma, which is a big factor in why he’s not driving.
I get knocked off my block for weeks with a regular cold thanks to my asthma. I can’t imagine what it would be like getting the coronavirus that would attack my respiratory system even more. So, for now, we’re not driving.
Every driver has to make their own individual calculations for what’s worth it to them, their family, and their livelihoods. If you’re driving right now, what is demand like out there?
If you’re not driving, what is unemployment like in your state and when do you think you’ll start driving again, if ever? Let us know in the comments below!
-Paula @ RSG
Quick links:
- Need to earn extra money but don’t want to drive rideshare? Check out these gig jobs
- Our top recommendations? Instacart is hiring almost everywhere right now!
- Postmates and DoorDash are also other solid options
- Take our survey and let us know – how much are you making on unemployment?