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Shortchanged Freelancers See Some Relief -- $100 more a week -- In New COVID Deal

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(Chava Sanchez/LAist)
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The new COVID relief bill passed by Congress includes an extra $100 per week for mixed-income workers caught in a loophole that leaves them with artificially low benefits.

Lawmakers say the new aid is needed because many self-employed workers are getting shortchanged by the unemployment system. But some L.A. freelancers say the 11-week boost will do little to lift them out of a deep financial hole.

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"How is that supposed to make up for the nine months that we were robbed?" asked Danni Katz, an unemployed North Hollywood production hair and makeup artist.

HOW FREELANCERS GET STUCK WITH PALTRY UNEMPLOYMENT CHECKS

The mixed-income loophole arises from a quirk in the way the unemployment system calculates benefits for jobless workers. Applicants with small amounts of W2 employee wages in their recent work history will receive benefits based on that income alone. Their 1099 freelance income will be disregarded -- even if it represents the vast majority of their lost earnings.

For Katz, a few old W2 checks left her with a weekly benefit of just $92 instead of the $450 per week she would have received had the state taken her 1099 freelance income into account.

Katz said for now, that $92 helps cover groceries. "But I have bills, I have rent, I have autopay on my car payment and insurance. It's just not helping at all," she said.

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Congressman Adam Schiff (D-Burbank) says many L.A. workers in fields such as entertainment have been hit hard by the mixed-income problem. That's why he pushed for a $125 weekly add-on for workers caught in the loophole.

The original proposal was negotiated down to $100 in the final bill. To qualify, workers excluded from the Pandemic Unemployment Assistance program must show that they earned more than $5,000 in self-employment income during the most recent tax year.

"It's a bit less than what we had originally," Schiff said. "But given how scarce resources were in this compromise bill, we were lucky to have it included at all."

UNCLEAR WHEN WORKERS CAN EXPECT TO SEE RELEIF

The weekly $100 boost will last through mid-March and will be in addition to a $300 weekly federal supplement included in the COVID relief bill for all unemployment recipients.

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But the $100 for mixed-income workers is not guaranteed in the bill. States must opt in to the new program.

California's plans are still to be determined, and it remains to be seen how quickly the state could start distributing the payments.

Officials with California's Employment Development Department said in an email, "Following Congressional action being signed into law, we hope to receive guidance from the U.S. Department of Labor as quickly as possible to determine implementation timelines."

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