What unemployment benefits are there for self-employed and contract workers?

They are out of work and thousands of self-employed workers want to know if there will be relief for them as COVID-19 has drastic impacts on the economy.

At this point, independent contractors or self-employed don't qualify for unemployment benefits, but these workers are hoping that changes.

Linda Draper owns K-9 Custom Care LLC. She provides grooming, boarding, and training for dogs at her home, but all of her clients who board their dogs during vacations canceled, which means her income dried up.

"There's a large sector of people that works for themselves, and there's going to be no income, no help, and it's not so much crying, but are there ideas, who has ideas?" she said.

In just five days, Draper has lost over $6,000 to boarding cancellations as her clients aren't going on their spring break vacations. Under the current unemployment laws, Draper does not qualify for any assistance.

"You can't get unemployment, yes it's really nice that the check the government is going to send, but there's got to be other routes to figure out to stay and survive," Draper said.

Desiree Green, owner of Sorella Spa in Cary, agrees.

She was still trying to see her clients, but now that all spas and salons have been ordered to close, she's worried.

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"It is scary that there are no benefits for us if you close your doors. No paycheck. You can't pay your bills or put food on the table," she said.

She thinks the toughest part, besides shutting down her business that she's worked so hard to build over the last five years, is that there are no benefits being offered to the self-employed.

"There is no unemployment. They say there are small business loans but how do you actually apply for that when there are certain stipulations on there that work towards my advantage and what I need?" Green asked.

While there is a need for financial relief for the self-employed and contract workers, employment attorney Matt Harbin with Law Offices of James Scott Farrin says right now contract workers aren't protected when it comes to benefits.

"If you don't have an employment relationship, you're not entitled to anything under current state or federal law," he said.

While Gov. Roy Cooper has expanded unemployment benefits in North Carolina, it still is not enough for 1099 employees.

"There is not a clear fix for them right now if they lost business or if they are unable to engage in what they've been doing," Harbin said. "For a lot of those people, there is not currently a way to get them compensated unless the federal government takes action and allows some level of compensation for everyone that has been impacted by this."

Right now, the only thing being offered from the federal government that would help is the proposed current stimulus package. If it passes, the self-employed could be eligible to receive a payment of up to $1,200, but that is only a one-time payment.

When it comes to unemployment claims filed with the state of North Carolina, from March 16 through 9 a.m. on March 23, the Division of Employment Security says they've processed 113,002 claims. Approximately 87 percent were COVID-19-related.

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A representative says they continue to see a very high level of phone calls coming into the call center and online filing. He says they are working to return calls as quickly as possible and that staff is also working overtime and on the weekends. The office is currently recruiting for 50 positions.

Employment Security official addresses website, phone delays and interruptions

When it comes to being eligible for unemployment benefits, the DES adds workers must have held a job considered covered employment.

A person's employment is 'covered' if it is through an employer that is liable under state and federal law to pay unemployment insurance tax on that person's wages.

Some examples of non-covered employment are employment by a religious organization, commission-based insurance, and independent contractors. The representative for DES also adds, if you are a business owner and are required to pay unemployment insurance taxes on your own wages, you may be eligible to receive unemployment benefits.