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The Vermont Department of Labor expects to have an application online within a week for self-employed, sole proprietors and others who need the Covid-19-related benefits that are rolling out now.
Vermonters who don’t traditionally qualify for unemployment benefits saw their livelihoods abruptly curtailed when Gov. Phil Scott ordered the closure of businesses in a series of executive orders in March.
While a record 60,000 furloughed and laid-off Vermonters have applied for benefits — and many others are trying to do so through an overloaded DOL — independent contractors, such as music teachers and massage therapists, have had to wait for the state to set up a new system that takes their unusual circumstances into account.
Officials hope to have that system running within a week, Cameron Wood, director of the state’s unemployment insurance system, told an audience of about 900 people at a DOL town hall meeting on Tuesday, April 7.
“Within a week, we hope to have an application online so people can submit an application for benefits,” Wood told listeners. He said the DOL would be able to start issuing benefits within the next seven to 10 days after that.
“It’s a rapid process,” said Wood, as listeners typed a barrage of questions for him. “I know it doesn’t seem like it. We do know there will be a great influx of claims from this population and that’s what we are preparing for.”
A new system
As the Covid-19 epidemic suppressed other economic activity around the world in March, Vermont lawmakers approved a bill that makes it easier for people to qualify for unemployment insurance. Congress around the same time approved a $2 trillion federal disaster aid package.
The state and federal legislation will enable many thousands of suddenly unemployed Vermonters to receive money for the next four months, including a $600 federal payment that is automatically sent to anyone who is receiving state unemployment insurance.
Remote workers who are still being paid, and workers receiving sick pay or paid leave, aren’t eligible.
“This is to ensure that people who can continue to work, will continue to work,” said Michael Harrington, the acting DOL commissioner.
But included for the first time among the eligible are sole proprietors, the self-employed, and contractors. In order to start paying them unemployment insurance, the DOL had to create an entirely new system. And that has taken a few weeks.
“Because this isn’t a group of people we typically work with, they are not in our system,” Harrington said on the April 7 public call. “We are essentially building a new system from scratch.” While this has taken Vermont a few weeks, Harrington said the state is actually doing better than many of its peers.
“If you were talking with one of our sister states, what we have heard is they are looking at months to fully set up this system,” he said.
“It’s still frustrating for people,” said Harrington, who earlier in the day told the Senate Commerce Committee that a record 60,000 people have signed up for benefits in Vermont. Harrington said many more haven’t been able to get through to have their claims processed.
“We have a team here in state government that is devoted to designing and launching this system,” he said.
A small safety net
Unemployment claimants have been vocal on social media and in emails to lawmakers, the Scott administration, and to news reporters about their frustrations with the overloaded DOL system. Many haven’t been able to get their questions answered, or their claims filed, because the 30-year-old system cannot handle the workload. Harrington said it crashes repeatedly every Sunday as people become eligible for file claims for the week before.
But the self-employed have been in a slightly different position, because they haven’t been able to file their claims at all, and because as the department worked out the details, Vermonters have said they’re not getting enough information about when they will start seeing checks.
“It’s rather terrifying right now,” said Walter Commonwood, who owns the salon and barber shop Metro Hair in Burlington.
“There is no compensation for an independent business owner to have any kind of insurance or anything like that,” he said. “I’ve already been out of work three weeks, and it might be three to four weeks more, perhaps even longer.”
Harrington and Wood sought on the call April 7 to answer as many questions as they could about what would be available, and when, to self-employed claimants. One such question was about unemployment benefits for someone who owns a Vermont limited liability company and doesn’t draw a salary.
“We will have to validate in some way, shape or form some level of wage information,” Wood said. “You have to have a certain amount of wages … it demonstrates an attachment to the labor force. You have to meet monetary thresholds in order to be eligible.”
Wood emphasized that state and federal payments would be retroactive to when claimants stopped receiving their work income, so those who haven’t been able to file won’t lose weeks of money.
“No one will be denied benefits by not filing today,” Wood said. “If you choose not to file because you are awaiting further information, we’ll be able to backdate your claim to a point where these pandemics started, where you were directly impacted.”
State benefits will be based on prior earnings, as they are now, but the $600 check from the federal government will be mailed to everyone who receives state unemployment insurance, no matter the size of their state check.
As with the benefits system before the Covid-19 crisis, there are also an array of exceptions and deductions, such as money owed for child support or overdue taxes, Harrington told lawmakers earlier in the day.
“As you can imagine, there’s nothing easy about dealing with the federal government,” he said. “They certainly gave us a lot of opportunity with regards to benefits, but there are a lot of hoops and red tape to jump through. It creates a monstrous task for us in terms of how we calculate benefits and things that need to be considered.”
Commonwood, who is 67, said he has heard from two clients who contracted Covid-19. He hadn’t seen either in person in many weeks, he said. But he easily could have, he said, proving to him that Scott’s order closing gyms and salons March 23 was necessary to contain the spread of the virus.
“It would have been very, very easy, if any salons or barbershops had been open, for things to spread pretty quickly,” Commonwood said.
The DOL will continue holding its series of town meetings for employers and unemployment insurance claimants in the coming days and weeks.