Filing for unemployment when self employed or an independent contractor in Florida

Filing for unemployment when self employed or an independent contractor in Florida

Like everything else this past week, information is changing rapidly.

Many people are wondering how to collect unemployment in Florida as an independent contractor (NOTE: Unemployment is called Reemployment in Florida).

We are also being asked how unemployment relates to the PPP Loan for independent contractors and self employed people — that do not have employees.

As it has often over the past week, the information in this newsletter will likely change many times in the coming week.

The below, and the links are a good starting point, right now. Make sure that you are getting your information from government agency websites to ensure accuracy when you are doing your research. They are kept the most current. Media articles, specifically ones that are written in the past, often do not have the most current information. Government sites are updated in real-time based on the information they currently have.

We do now that as of TODAY there is new guidance on self-employed workers and independent contractors as it relates to filing for Florida unemployment, and this is the main reason that this information is being sent out today.

I suggest that you read this, and read all links available, to better understand what we know now.

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UNEMPLOYMENT FOR SMALL BUSINESSES AND INDEPENDENT CONTRACTORS:

The U.S. Department of Labor today announced the publication of Unemployment Insurance Program Letter (UIPL) 16-20 providing guidance to states for implementation of the Pandemic Unemployment Assistance (PUA) program. Under PUA, individuals who do not qualify for regular unemployment compensation and are unable to continue working as a result of COVID-19, such as self-employed workers, independent contractors, and gig workers, are eligible for PUA benefits.

Please read the FULL letter by clicking on this link below:

“Pandemic Unemployment Assistance (PUA)”

What is the definition of “Self-employed individuals” under the PUA?: “Self-employed individuals” as defined in 20 C.F.R 625.2(n) means individuals whose primary reliance for income is on the performance of services in the individual’s own business, or on the individual’s own farm. These individuals include independent contractors, gig economy workers, and workers for certain religious entities/

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CAN YOU APPLY FOR FLORIDA UNEMPLOYMENT AS A SMALL BUSINESS OR INDEPENDENT CONTRACTOR?:

The Florida Unemployment website now reflects these changes in the FAQ section (link below).

“Q: Am I eligible for benefits if I am an independent contractor? A: Yes, under the CARES Act, Individuals who are self-employed, independent contractors and nonprofit employees, those that are otherwise ineligible for state Reemployment Assistance benefits and those that have exhausted state and federal benefits may be eligible for Pandemic Unemployment Assistance. However, Pandemic Unemployment Assistance eligibility does not include individuals who have the ability to telework and receive pay or individuals who are receiving paid sick leave or other paid leave benefits.”

Click the link below for the full FAQ section of the Florida Unemployment website on this – it includes NEW information about filing for unemployment in Florida if you are self employed:

“New FL Unemployment FAQ now includes CARE Act Final”

So, if you apply for unemployment now, and qualify, how much will you receive? You will receive the amount that will be calculated by FL Unemployment PLUS an additional $600 per week – extended up to 13 more weeks on top of the normal unemployment time of 12 weeks (minimum) – through July 31, 2020, if you need it for that long.

Just as an example regarding only the extra $600 per week: If you apply and start receiving the extra $600 per week, and you receive unemployment (let’s say starting on April 20), that would give you an extra $600 per week for the 15 weeks leading up to the July 31 allowance for the extra $600 deadline date. To calculate that extra amount, 15 weeks x $600 more per week equals $ 9,000 more in unemployment, in addition to what is already available from Florida Unemployment. This assumes you would need it for that long (see the explanation of ‘ELIGIBILITY’ for unemployment under the PUA guidelines in the link above and below).

Eligibility to qualify for Unemployment as defined in the above PUA link document provided to Florida Unemployment:

To better understand your eligibility, you should read the FULL explanation of eligibility rules under the PUA by reading the above “Pandemic Unemployment Assistance (PUA)” link provided HERE (it’s the same as the link above) for a full understanding of your eligibility. Please note that the FL Unemployment workers will ultimately decide your eligibility based on guidelines set forth, and based on their own regulations. Read ALL eligibility requirements in the PUA link for guidance. The State of Florida Unemployment will ultimately make their determination of your eligibility. The PUA is the guidance to them. You always have the right to appeal a denial for unemployment to the State of Florida Unemployment.

Your eligibility will likely lapse, when one of the eligibility requirements are no longer met. FL Unemployment will have further guidance on that as well.

Per the FL Unemployment FAQ site:

When reviewing your claim, we will look to answer several questions that will impact your eligibility. Here are some examples: Ability and Availability Issues: In addition to reviewing why you lost your employment, we will look at whether you are able to work in another job. If you are not available to accept a job if one is offered, you will not qualify for benefits.

A GOOD MEDIA RESOURCE UPDATED AS OF 4/4/2020: The below is a great link with an article that likely explains many of your unanswered questions about FL Unemployment:

ARTICLE: Tampa Bay Times — Florida’s unemployment benefits: We answer your questions

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UPDATE: WHAT DO WE KNOW NOW ABOUT THE PPP AND INDEPENDENT CONTRACTORS?

We have recently learned that you can not receive BOTH the PPP Loan AND Unemployment benefits. I mentioned that in a previous newsletter on Thursday evening.

There has not been much new information available about the PPP Loan and how independent contractors and self employed workers would apply for the PPP Loan — unless you have employees, those applications are starting to be processed now by banks. The businesses that are applying now are those businesses with prior employees (prior to 2/15/2020) in 2019 and are not expected to be laying off many of their employees prior to June 30, 2020 (see more on that from my previous posts).

There has not been any additional guidance on the calculation of the forgiveness of the PPP Loans as it relates to independent contractors, other than the current guidance that is available for businesses with employees. Essentially, then, it is the same for now.

The SBA, for the PPP Loan purposes, currently defines “payroll costs” for “independent contractors or sole proprietors” as “wage, commissions, income, or net-earnings from self-employment or similar compensation.”

Again, there is no further guidance from the SBA at this point other than that. Why no further guidance yet? This is because the SBA is not requiring banks to have independent contractors to be able to apply for the PPP Loan until 4/10/2020. However, some banks seem to be gathering information from self employed workers for the PPP Loan now (asking for 1099-Misc Forms, etc). It is our understanding, however, that the applications for those will not be ready from your business bank until 4/10/2020 at the earliest – per the SBA’s guidance. Again, contact your banker to be sure. The banks likely need more time to interpret this as they have needed additional time for SBA guidance for businesses that have employees. Many banks still have not interpreted the rules set forth by the SBA in relation to the CURRENT business applications that were to be for businesses with employees due by 4/3/2020, per the deadline set forth by the SBA.

Even after 4/10/2020, when an independent contractor ‘may apply’ for the PPP, it is not yet clear how much they will receive at this time. The amounts for most small independent contractors. based on current PPP calculations and forgiveness rules, – subject to change – are far from clear .

As of now, no further guidance has been given yet on if the calculation and forgiveness rules for “independent contractors or sole proprietors” as it relates to how much or how this will work – other than what the SBA has already determined — which leaves more unanswered questions (see below). At this time, we can’t assume that for independent contractors that it will be the same calculations as it is now — based on how many changes that were made to the PPP guidance throughout last week for businesses with employees.

Unanswered questions about independent contractors and PPP Loans.

The questions that everyone has now are, would the PPP Loan be forgiven if your independent contractor “net-earnings” drop during the 8 week period leading up to June 30, 2020, or would it convert into a loan that you have to pay back? How much would the PPP loan be for based on the “net-earnings” requirement? All of the current bank applications for the PPP Loans reference 2019 employee ‘payroll costs’. Again, we don’t know the answers yet until further guidance comes out from the SBA, and more importantly, the banks, that will still need to interpret the SBA guidance on this to provide the PPP Loans to independent contractors. All they have is the current SBA information on this.

Hopefully, we will know more about the PPP very soon as it relates to independent contractors. Estimates are that further guidance will be coming out within a week or so.

Again, we will all have to still wait for further guidance from our banks for this. In the meantime, you will have to ask your banker when and how those loans are being administrated, if you are a self-employed individuals without employees. The banks will be the first to know! You may try to contact your bank now, if you are still interested in the PPP loans.

In the meantime, unless you need a PPP loan, if you are self employed or an independent contractor, Florida unemployment has set further guidance, and maybe that is all that you need to know anyway?

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ECONOMIC INJURY DISASTER LOAN (EIDL) REMINDER:

As a reminder, there is also the Economic Injury Disaster Loan (EIDL) available that is allowed (under certain COVID-19 related circumstances). if you are self employed. Even if you are collecting unemployment, as a self employed worker or business owner, you may benefit from the EIDL loan. Please note, the EIDL is a loan, with a grant potential of “up to” $10,000.

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COMPLIMENTARY INSURANCE REVIEW

Now is the time to make sure you are not overpaying insurance premiums and are not properly insured. Take the time you have now and invest it in a complimentary insurance review with our affiliates at Wallace Welch & Willingham (Unbehagen Insurance). They have been serving Florida for over 90 years. Contact Matt MacMahon today. mmacmahon@unbehageninsurance.com 727-522-7777 ext 168 — www.UnbehagenInsurance.com

FURTHER COVID-19 UPDATE INFORMATION

We will be keeping you updated on small business and individual stimulus changes and tax changes during these times as it pertains to COVID-19. There are a lot of different opinions and commentary online about the stimulus that will be coming out soon. We will not provide speculation, rather we will only provide facts as soon as they are available. So, we will continue to proactively send out information as it becomes finalized and real. We will do so via these newsletters, on our website link for COVID-19 resources and information and on our Facebook page.

Our staff at Unbehagen Advisors is committed to advising you and your business. We appreciate your support of our firm — Since 1992.

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