Over the past year, the pandemic and our nation’s response have highlighted some of the flaws in our antiquated federal-state unemployment insurance system.
The CARES Act addressed some of these well-recognized problems, particularly through the Pandemic Unemployment Assistance (PUA) program, which provides unemployment benefits to people who do not normally qualify for traditional unemployment insurance (UI).
Workers eligible for these benefits include the self-employed and small-business owners, independent contractors, gig economy workers and workers who do not have a long enough work history to qualify for state unemployment insurance benefits.
About 8,000 workers in West Virginia are claiming pandemic unemployment benefits, and as many as 40,000 claimed those benefits during the height of the pandemic. None of these workers would have qualified for any unemployment benefits in the absence of this program, making it a lifeline for thousands of households in West Virginia.
To date, the program has driven $163 million into West Virginia, helping unemployed workers pay bills, put food on the table and support businesses as we emerge from the pandemic.
While enacted in response to the pandemic, the pandemic unemployment program also emerged during a time when a rise in contract employment, rather than traditional employer-employee relationships, has sparked interest in how to protect such workers when they are out of work. The success of the pandemic unemployment program during this unprecedented crisis shows that providing jobless benefits to unemployed independent contractors and the self-employed is a sensible and effective policy.
As such, it is troubling that Gov. Jim Justice has decided to end West Virginia’s participation in the program — as well as the other CARES Act unemployment measures — months early, stripping unemployment benefits from thousands of independent contractors and self-employed West Virginians.
Equally troubling is that, during this past legislative session, Justice introduced — and the Legislature passed — Senate Bill 272, legislation that makes it easier for businesses to misclassify workers as independent contractors, thus taking away basic labor protections like minimum wage, workers compensation and unemployment insurance.
The argument offered up in support of SB 272 is that employees want the “freedom” to be independent contractors. But, as the success of the pandemic unemployment program has shown, access to unemployment benefits is critical for independent contractors.
Instead of learning from the program and acknowledging the hole in the existing unemployment insurance system for independent contractors, Justice is ending the program earlier than is required. Rather than recognizing the need for access to unemployment benefits for independent contractors, Justice has heavily implied that the juirecipients are lazy and scamming the system to avoid going back to work, despite no evidence to support his claims.
At the same time, he has signed legislation to make it easier to classify workers as independent contractors and strip them of access to unemployment benefits.
When it comes time to take away basic labor protections, independent contractors are described as job creators, entrepreneurs and the future of work. But when these exact same workers need help and support, suddenly they transform into lazy scammers who are cheating the system.
It’s hypocrisy, but there is a common thread. By pushing to make it easier for businesses to misclassify their employees as independent contractors, and by claiming independent contractors are lazy for collecting unemployment benefits, the safety net is weakened, labor protections are worn down and West Virginia’s workers are left — once again — with the short end of the stick.