By Nancy Joerg, Esq., Managing Shareholder – St. Charles Office, Wessels Sherman Joerg Liszka Laverty Seneczko P.C., St. Charles, Illinois, (630) 377-1554, najoerg@wesselssherman.com, www.wesselssherman.com
As I write this article in the COVID-19 era with the purpose of assisting Illinois companies who use independent contractors, things are moving rapidly in terms of new federal laws, regulations and state guidelines. Changes are occurring at the Illinois Department of Employment Security (IDES) with shocking speed!
NEW REGULATIONS AND GUIDELINES CHANGING ALMOST WEEKLY: For those companies using independent contractors, this article is relying on the latest information from the IDES website. The reader should be aware that new regulations and guidelines can pop up on an almost weekly basis. Be sure to check with your employment lawyer before formulating any actual plans based upon statements made in this article.
IDES CURRENT TREATMENT OF INDEPENDENT CONTRACTORS: One of the most controversial things that I have read on the IDES website page about COVID-19 and Unemployment Benefits (in the section on Frequently Asked Questions for Claimants) concerns the question and answer as follows:
Claimant Question: “I am an independent contractor and do not have any business because of COVID-19. Am I eligible?”
IDES Answer: Only employees get regular state unemployment insurance benefits.
The bottom line is that MISCLASSIFIED INDEPENDENT CONTRACTORS IN ILLINOIS ARE ELIGIBLE FOR REGULAR STATE UNEMPLOYMENT INSURANCE BENEFITS BECAUSE THEY ARE VIEWED AS EMPLOYEES BY THE IDES.
IDES WILL INVESTIGATE WORKING RELATIONSHIP: Another startling concept to be gleaned from the IDES website is that the IDES will have to investigate the working relationship between the independent contractor and the Illinois company that pays the independent contractor to determine if the Claimant is actually a misclassified independent contractor or a “legitimate independent contractor.” Of course, there are other issues to be decided such as whether the independent contractor lost his or her job due to COVID-19.
THE $600 PER WEEK BENEFIT: It has been widely publicized all over the Internet, on television, on the radio, and in newspapers that independent contractors, due to new federal legislation, are eligible for a $600 per week (federal stimulus) unemployment insurance benefit. Many people assumed that the $600 per week federal stimulus would be added on top of what the independent contractor would also get for regular state unemployment insurance benefits.
There are several things to keep in mind here. One is that only misclassified independent contractors will get both regular state unemployment insurance benefits and the flat $600 per week federal unemployment insurance stimulus benefit (keep in mind the $600 per week benefit ends, per federal legislation, at the end of July 2020).
Legitimate independent contractors (as defined by the IDES under the Illinois Unemployment Insurance Act) will not get regular state unemployment insurance benefits and will only get the flat $600 per week federal stimulus benefit until the end of July 2020. It appears that after July 31, 2020, legitimate independent contractors will no longer be getting any unemployment insurance benefit of any type.
It is unclear at this point in time if every independent contractor who applies for unemployment insurance benefits will get the full $600 per week federal stimulus benefit, but the implication is that they will. It remains to be seen how this actually will shake out. Additional legal issues will also arise such as if the independent contractor is lacking work due to COVID-19 because this appears to be a legal requirement under the federal stimulus legislation.
PARTIALLY-EMPLOYED INDEPENDENT CONTRACTOR: An interesting question and answer on the IDES website page about COVID-19 and Unemployment Benefits (in the section on Frequently Asked Questions for Claimants) appears as follows:
Claimant Question: If I am a partially-employed independent contractor and I am eligible for benefits under the federal legislation, will I receive the full amount of the extra $600 per week?
IDES Answer: Yes. If you are eligible for even $1 of unemployment benefits, you are eligible for the entire $600 extra.