Unemployment Insurance Questions and Answers
We’ve received a lot of questions about unemployment benefits, especially from independent contractors, gig workers, and those who are self-employed. Although these workers are newly eligible for benefits under the CARES Act, the process has been especially confusing for workers who have income from both normal employment (W-2 employment) and from independent contract work (e.g. driving for Uber). I’ve been in conversations with the Department of Labor and Employment to get answers to some of the questions we’ve received. A quick summary is below.
State Unemployment Insurance is the traditional unemployment benefit administered by the state of Colorado that employees can access when they’ve become unemployed. It’s called “insurance” because a small deduction is taken out of your paycheck to pay into an insurance pool for when you need it. Click here to apply.
Pandemic Unemployment Assistance is the new unemployment benefit that was established in the CARES Act, which was recently passed by Congress (not the state legislature), in order to provide unemployment benefits for workers who are independent contractors, self-employed, or work in the gig economy like driving for Uber. This is now administered by the State of Colorado, but all of the rules and parameters were dictated by Congress in the CARES Act. Click here to apply.
What if I have both W2 AND contractor income?
If you are eligible to receive unemployment assistance through State UI, meaning that you have W-2 wages of at least $2,500 over the last 12 months, then you need to apply through the state UI system — not PUA. Even if you have both W-2 wages and an independent contractor income, these benefits will be calculated only on the actual reported (W-2) wages; your additional independent contractor income will not be taken into account for this calculation. Once your benefits for your W2 income have run out, then you can apply for PUA for your independent contractor income.
If you do not have more than $2,500 of reported W-2 wages over the last 12 months, and have income from gig/contract/self-employed work, then you should apply for the PUA. These unemployment benefits will be backdated as far back as March 29th.
How do I know if I’m eligible for State UI?
The current determining factors are:
- Loss of job through lay off or furlough
- lf your hours have been reduced, or you cannot work due to statewide closures
- W-2 earnings of $2,500 or more over the 5 calendar quarters (currently back to January 1, 2019)
- Eligible applicants cannot be working more than 32 hours per week and may not be making more than what the state would pay – roughly 55% of an average weekly paycheck.
Please note that some of the regular requirements for receiving benefits like maintaining an active job search have been waived in light of COVID-19. Please click here for additional information.
How do I know if I’m eligible for PUA?
You are eligible for PUA if you are an independent contractor or self-employed and don’t have $2,500 or more of W-2 earnings over the last 12 months. Others who can access PUA benefits include employees of religious organizations that do not pay unemployment, those diagnosed with COVID-19, those with families members diagnosed with COVID-19, those instructed by a health care provider to self-quarantine, primary caregivers for children/dependents currently unable to attend school, those scheduled to start work but no longer have a job offer due to COVID-19, and those who have become head of household due to a COVID-19-related death. Click here for more information.
Other things to know
- Traditionally, state UI benefits lasted 26 weeks, however the CARES act extended those benefits to 39 weeks.
- If you qualify for either the State UI or PUA, there is an additional $600/week payment through the federal relief package. You do not need to take any additional action to receive this benefit and it will be back dated as far back as March 29th. The $600/week will be deposited into your account.
- On April 20, the Colorado Division of Unemployment Insurance hosted a virtual town hall discussing the proper steps to filing for unemployment insurance, and provided further information. Click here to view it in English and here to view in Spanish.
- The Governor’s office and CDLE have created this website to assist those who have lost their jobs due to this pandemic.