As it did during Superstorm Sandy, the federal government is extending unemployment benefits to those who typically are not eligible for unemployment—independent contractors, the self-employed, sole proprietors and those without sufficient work history.

Unlike Superstorm Sandy, the coronavirus pandemic is going to have a lot more people in this category filing for benefits—to the point where the state Department of Labor will not be able to process the applications by hand as they did in 2012.

Approving an application for an independent worker is especially difficult because unlike regular employees, they are not in the DOL’s database.

“When someone is a wage-earner, a W-2 earner, we have all of their records,” New Jersey Labor Commissioner Robert Asaro-Angelo said during a recent NJBIA webinar, “so when they file a claim, 50% do not need any agent intervention, they can go right through. But by the very nature of it, for independent contractors and the unemployed, we have no records for them in our system.”

After Superstorm Sandy, the department had to process applications by hand for independent contractors and the self-employed. The department had to manually review their IRS forms and/or tax returns to determine income and how much they have worked in order to correctly determine both benefit eligibility and their level of benefits.

The sheer volume of unemployment applications received during the coronavirus pandemic makes this type of manual processing virtually impossible. Asaro-Angelo said his department is trying to figure out how to process them en masse, but until the federal government publishes regulations, they won’t know what the system will look like.

On top of that, guidance from the federal government on how to run the program just came out late Sunday night.

None of this should discourage independent contractors, the self-employed, and sole proprietors from applying.

“You’re going to get all of the money you’re eligible for,” Asaro-Angelo said during the webinar. “It’s not going to be as fast as I want you to get it, there’s no doubt about that, but you will get it.”

As NJBIA reported Tuesday, the first step for receiving emergency unemployment is to get denied under the regular unemployment program. The department is still analyzing the guidance and developing a program for independent workers. At the same time, its staff is trying to process a record-high number of applications for unemployment.

For independent workers, patience and perseverance will be needed to get approved for unemployment insurance.

View the webinar on our coronavirus resources page, and get instructions for filing at the Department of Labor website.



3 responses to “Why Unemployment for Independent Contractors Takes So Long”

  1. Tracy Spencer says:

    As an employer representative, I am faced with unique situations for several different employees. I have an employee who must file a combined wage claim in Pennsylvania because he works in 2 different hotels. He’s received no guidance from either site. Another former resigned from my company in October of last year and works in Washington DC and was laid off. DC denied her claim, but in NJ it shows she resigned from our company so she is in limbo. When will these people be assisted??? Employers cannot reach NJ DOL to intervene and verify these special circumstances. I’m happy the money will come eventually, but some people need to eat now. It’s been over 3 weeks for some of my employees!

  2. arnold skoaland says:

    curious as to how independent contractors get will paid unemployment benefits, when they haven’t been paying into the system? is there a mechanism whereby down the road when they are back to work, they pay it back? or do they become part of the system permanently, paying into it on a regular basis? or do the W-2 earners just shoulder the extra burden?

  3. Bill says:

    I’m self imployed an i did my taxes and I had to pay the same as you did just I had to save my money an pay in bulk b4 I can renew my license so talking bout shoulders why you eat tonight I’m not. Haven’t had work in weeks wish they’d figure it out. I kno peeps that already got there stimulus checks and already got unemployment. I clean cabins and I can tell you that you can make jus as much at McDonald’s at this point so see ya at the drive thru because us self employed cabin cleaners ain’t getting any help we got familys to with no money coming in at all we make the same amount as a Cop/School Teacher so your talking 26 to 30 a year some maybe more but maybe less but self employed can’t pay mortgage/ go grocery shopping cause it’s been weeks since being payed so shoulder that