The Atlanta Journal-Constitution
Help stalls for Ga.’s laid-off workers
They’re being told to wait to apply for jobless benefits.
Despite a rising urgency, the wait for government help likely will continue into next week for laid-off contractors, gig workers and the self-employed.
Although expansion of unemployment benefits to those workers became law March 27, state systems in Georgia and around the country still are not ready to handle the flood of those applications.
And while those workers last week were encouraged to apply for jobless benefits, the Georgia Department of Labor has shifted gears and told them to hold off: The state must first reconfigure its systems to comply with the new federal guidelines.
Workers are being told to wait with much of the state’s economy shut down and many households without pay as rents, mortgages and other bills loom large.
“Since this pandemic started, every last one of my clients have canceled,” said Marisa Johnson, 43, of Powder Springs, who runs a small cleaning business and does odd jobs. “I have no income, and I am desperately awaiting info on how to apply for the new unemployment. My savings will be depleted by May 1 if it continues this way.”
The state last week said it had processed 133,820 applications for unemployment insurance — more than 10 times the level of an average week and three times more than the worst week of the Great Recession. Officials say this week’s report could be worse.
Because of the coronavirus, the labor department closed its career centers and asked laid-off workers to file applications online. But the website had been set up for workers who have been on a payroll and whose income is reported using a W-2 form, which would not include gig, contract workers and the self-employed.
For those workers whose application for unemployment benefits has been accepted, checks should be in the mail next week, a labor department official said.
But for workers without a W-2, the department only recently received the guidelines they needed to process applications. And that left thousands of workers frustrated when they tried to apply for aid. Some were rejected. Many found the system wouldn’t even let them apply.
“Unfortunately, state agencies have to build new infrastructure to offer a service and benefit that they’ve not been offering before,” said Alex Camardelle, a senior policy analyst at the Georgia Budget and Policy Institute.
The struggle of the states to catch up to the new law is in part about software, but also about finances.
The money to pay benefits for W-2 workers comes from a pool filled with taxes on employers. However, benefit money for gig and contract workers will come from the federal government.
“No state is distributing funds right now,” said Kersha Cartwright, spokeswoman for the state Department of Labor. “Because if they do it without the (federal) guidelines, they run the risk of not being reimbursed. If they don’t follow the guidelines, they break the law.”
Some states, including New York, have been accepting applications from gig workers, even though they can’t yet send checks. But Georgia officials decided over the weekend that they would ask laid-off contract workers not to apply yet.
“I would hate to have to come back to people and say, ‘You know, you have to file again,’ ” Cartwright said.
The economic upheaval is widespread. The scale of the overall problem is unprecedented. Estimates are that unemployment rates — at a historic low of 3.5% two months ago — soon will rocket to double-digits and could even hit 20%.
Generally, it helps to have a two-income household, such as Paulding County couple Victoria Alvarenga, 32, a marketing executive working as a contractor, and her husband, who manages a bookstore.
The problem is that both their jobs are threatened.
“My husband has been furloughed for the last two weeks, his last paycheck was yesterday,” she said. “My last paycheck will be Friday.”
The issue is more than an individual hardship: Those workers without a W-2 represent about 9% of the state’s roughly 5 million workers, according to Michael Wald, a former U.S. Labor Department senior economist. And they are in trouble. “We had 400 calls in three days,” said Jonathan Johnson, an Atlanta lawyer who over the years has represented victims of many disasters — none of them national economic calamities. “We have just been swamped.”
Single-person businesses are at the knife’s edge of survival, he said. “These people don’t have savings. These folks will be filing for bankruptcy in the next 60 days.”
While acknowledging the challenge of retrofitting systems to manage a huge, new clientele, Johnson said the state machinery must move faster than it usually does.
“They need to get the money out quickly,” he said. “Paying them six months from now will be like dropping money off at the cemetery. Their businesses will already be dead.”
‘They need to get the money out quickly. Paying them six months from now will be like dropping money off at the cemetery. Their businesses will already be dead.’
Jonathan Johnson Atlanta lawyer