Why not everyone gets new jobless pay
Many in state won’t be eligible for $300 supplement
The Employment Development Department will begin doling out $300 a week in federal Lost Wages Assistance the week of Sept. 7, but many unemployed Californians won’t get the extra money because their base unemployment benefit is too low.
President Trump authorized the assistance program after Congress adjourned in August without agreeing on a way to replace the $600perweek supplement that everyone got on top of their regular state or federal pandemic unemployment benefits from April through July. Unlike the $600 supplement, the $300 boost will only go to those getting at least $100 a week in state or federal unemployment.
This new requirement “will disproportionately hurt people of color and underpaid workers,” the National Employment Law Project and 21 other groups said in a news release.
It will also hurt many “mixedincome” earners who got most of their income from selfemployment and a small part reported as employee wages on a W2 form. Many of them have been getting less unemployment compensation than they would have had they not received any W2 wages, and they could lose out on the $300 entirely.
Cathy Rigl of Pleasanton is among them. For the past three years, Rigl worked as an independent contractor for a company that provides customer service and sales training, mostly for hospitality companies. She also worked a few days a month
as an employee in the Wente Vineyards tasting room in Livermore, mainly for the employee discount and the “fun work environment,” she said.
When the pandemic hit, both jobs ended and she applied for unemployment. She was shocked to learn that her benefit would be $56 a week, based solely on her W2 winery wages.
“They did not take into account my main source of income as an independent contractor,” she said. Based on that job, she would have received at least $167 a week in federal Pandemic Unemployment Assistance, and likely more.
The federal Cares Act created Pandemic Unemployment Assistance for selfemployed and other people who don’t qualify for regular state unemployment insurance. That law, however, said that if a person had enough W2 employee wages to qualify for regular state unemployment, they could not receive PUA, even if that would be a higher amount. Many independent contractors who had one or two clients treat them as employees found themselves in this situation.
In California, the minimum weekly benefit is $40 for regular state unemployment and $167 for PUA.
Although $56 a week “was far less than I should have received,” Rigl said she didn’t mind at first because from April through July, she received the $600 per week in federal Pandemic Unemployment Compensation, also funded under the Cares Act.
The lost wages program will use up to $44 billion from a federal disaster relief fund to pay $300 a week for a minimum of three weeks. Because it’s limited to those getting at least $100 a week in state or federal benefits, everyone in California getting PUA will qualify for the extra $300, while those receiving less than $100 in state benefits will not.
“It’s ridiculous,” Rigl said. “I’m a professional corporate trainer. I’m getting this monthly allowance a high schooler would get and it will make me ineligible.”
Under Trump’s program, people could get $400 a week if their state pitches in $100 from their own (nonunemployment) resources, but only a handful of states (excluding California) are doing that.
To get the $300, people also must selfcertify that they lost work because of the coronavirus. That was already a requirement for PUA, but not for regular state unemployment.
EDD said Thursday it will being processing Lost Wages Assistance “in phases” for eligible individuals beginning Sept. 7. “The first phase will cover claimants who previously provided information that they were unemployed due to a COVID19 related reason on their initial application” and have received state or federal unemployment payments for weeks between July 26 and Aug. 15. “Generally, claimants who applied for benefits midMarch” would have been asked about COVID19. In midSeptember, EDD will begin asking other claimants to selfcertify if they were affected by COVID19 so they can qualify for Lost Wages Assistance, which would be retroactive to Aug. 1.
EDD hasn’t said how many unemployed Californians won’t get the $300 supplement because they’re below the $100aweek threshold, but in Texas, it is about 1 in 5.
Trump’s plan is “totally inadequate” and “continues the deeply unfair treatment of mixedincome earners,” Rep. Adam Schiff, DBurbank, said in an email. On July 20, Schiff introduced HR7691, which would let mixedincome workers who earned at least $7,250 from selfemployment last year opt into the PUA program and get retroactive benefits based on their total income. States would have to agree to provide this option. A companion bill in the Senate, S4442, was introduced Aug. 4.
One question is how money earned during unemployment will affect Lost Wages Assistance.
When people earn or receive income while receiving unemployment benefits, the income reduces their benefit according to a formula. If they earn or receive more than $100 one week, EDD will deduct 75% of the amount from their base benefit that week.
As long as their base benefit remained above zero, they could still receive the $600 a week supplement before it expired. What’s not entirely clear is whether the same will be true with the $300 supplement, or whether their base benefit would have to be at least $100 to get the $300 supplement.
The Department of Labor has not answered this question directly, but in a letter to states it said, “An individual is determined to have received at least $100 per week for purposes of being an ‘eligible claimant’ if the individual’s (weekly benefit amount) as provided on the monetary determination is at least $100 (including any dependents’ allowance).”
George Warner, an attorney with Legal Aid At Work, said that means a person would get the $300 as long as their base benefit remains above zero.
Maurice Emsellem of the National Employment Law Project agreed. “My understanding is that the ‘monetary determination’ is what the worker is provided when they are first found eligible for (state or federal unemployment), so that would appear to mean that even if the worker’s wages end up reducing the check to below $100, the worker would still qualify for the $300,” he said in an email.
Lost Wages Assistance is limited to three weeks for now, to make sure all states that want to participate can get at least three weeks. The payments will end when the $44 billion is exhausted, the disaster fund balance drops below $25 billion, Congress approves a replacement program or Dec. 27 — whichever comes first.
The disaster fund, administered by the Federal Emergency Management Agency, had a balance of $56.2 billion Thursday, down from $74.4 billion on July 31, as money flowed out for disasters and lost wages.
On Aug. 11, David Bibo, FEMA’s deputy associate administrator, told members of Congress, that “even with the quite significant projections” for hurricanes this season, “the $25 billion that is reserved is, we think, substantial enough for our response needs and the ongoing recovery needs.”
That was about a week before the California wildfires started. For perspective, FEMA paid out a total of $1.75 billion in public and individual assistance for the three wildfirerelated major disaster declarations in California in 2017 and 2018.
“They did not take into account my main source of income as an independent contractor.”
Cathy Rigl