California gig workers won’t have to repay aid
Many of the hundreds of thousands of California gig workers and independent contractors won’t have to repay part of their unemployment aid, under a provision in the new COVID-19 stimulus package signed by President Donald Trump.
The bill allows California and other states to waive their effort to collect overpaid Pandemic Unemployment Assistance payments from their recipients if a repayment “would be contrary to equity and good conscience.”
The clause means many workers won’t have to repay Califor
nia if they can show that they filed their PUA application in good faith and that repaying the state would cause financial hardship, said Michele Evermore, a policy analyst at the National Employment Law Project.
In past recessions, state agencies were generally inclined to authorize the waivers, Evermore said. In California, those who were overpaid can file the waiver by completing a Personal Financial Statement, which should have been mailed with the notice of overpayment after the verification of their income.
“State agencies understand that during an emergency, mistakes get made and benefits get out the door they shouldn’t have, so they waive left and right,” Evermore said. “I would encourage anyone to request a waiver if it would take a hardship for them to pay back.”
EDD, in an email, said it hopes to receive further guidance from the U.S. Department of Labor and encouraged people to watch for updates on its website.
Under the coronavirus relief bill passed in March that established the PUA, a federal unemployment insurance program for selfemployed, independent contractors, and gig workers, states were not allowed to waive their effort to collect the overpaid payments.
That created a problem for hundreds of thousands of gig workers and independent contractors, especially because of how the PUA was written. PUA has paid workers based on how much they made after deducting for expenses. But many workers reported to the Employment Development Department, which runs the PUA in California, how much they made in total.
The difference led many workers to get significantly more aid — some in the upwards of $10,000 — than what they were supposed to get, and the EDD later tried to claw some of that money back by asking people to verify how much they made after deducting for expenses.
“I would imagine the EDD would have some compassion over this issue because it’s a widespread error, and it was a misunderstanding,” Evermore said.
Still, Evermore noted going forward, those receiving the PUA should continue to report their “net” income, or how much they made after deducting for expenses.
“Everything about the PUA is the same except the end date,” she said. “Nothing else really changed.”
The provision addressing the overpayment issue, as well as the extension of the PUA to at least March 14, is a relief for Nancy Travis, 71, of Richmond, who could have been on the hook to pay back $4,000 to the EDD.
“I think a lot of people are breathing a sigh of relief today, if only temporary,” said Travis, who drove for Uber and Lyft before the pandemic.
But Travis said she has also contacted the EDD to get her on the regular unemployment insurance. The groups representing gig workers have been pushing for people like Travis to do so, saying those workers should have been classified as employees and receive regular unemployment insurance under Assembly Bill 5, which regulates who gets to be an independent contractor.
Reg ular u n empl o y - ment insurance pays people based on how much they made in total, meaning workers could get thousands more in aid than they would under PUA, said Nicole Moore, a driver and organizer with Rideshare Drivers United. Regular unemployment insurance also lasts longer, up to 59 weeks, compared to the PUA, which is set to run out in the spring, she said.
“Under the law, we were employees for the last 18 months,” Moore said, noting Proposition 22, which redefined gig workers as independent contractors only went into effect this month.