Can I Apply For Unemployment Due to Coronavirus (COVID-19)?

The most common question that people are calling our office about is whether they can apply for unemployment due to loss of work related to the coronavirus (COVID-19).  Our response outlined below applies to production, crew, artists and the music industry, but also other industries such as folks in the service industry. The answer depends on whether you’re a 1099 or paid via a W2.

A person paid with a W2 is an employee. 1099 is an independent contractor. If you’re in the state of California, you may recently be paid via W2 due to California AB-5. It is possible you’re still a 1099, and should be paid via. W2. In a 2018 case entitled Dynamex Operators West, Inc. v. Superior Court, the California Supreme Court ruled that companies must use a three-pronged test to determine whether a worker is an independent contractor or employee. The three pronged test is as follows:

1. The worker is free to perform services without the control or direction of the company.
2. The worker is performing work tasks that are outside the usual course of the company’s business activities.
3. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

If you’re a worker paid via a W2, your employer must pay into the state Unemployment Insurance Fund. When a W2 worker is laid off, the W2 worker can apply for unemployment benefits. If you are a W2 worker, you MAY be able to apply and get unemployment, or you might be denied because there are no deposits made in the base period. It depends on whether your W2 employers made deposits in the base period. Try applying.

The 1099 independent contractor does not have payments made on his/her own behalf into the Unemployment Insurance Fund and typically does not qualify to for unemployment benefits.

You can find information on how to apply for Unemployment benefits in any U.S. state here:

https://www.careeronestop.org/LocalHelp/UnemploymentBenefits/Find-Unemployment-Benefits.aspx

If you need any further assistance, give us a call for a free consult.