About 15,000 independent contractors, gig workers and self-employed business owners applied for unemployment benefits on a new platform the state launched Monday, according to the Colorado Department of Labor and Employment.
“I thought we would see more traffic into the system,” said Cher Haavind, a spokeswoman for the CDLE, noting the system had been stress-tested to handle twice as many claims. “We had plenty of bandwidth.”
Technology-wise, the system held up well, Haavind said, and was able to avoid the chaos that overwhelmed the original system in the middle of March. Given this is the first time independent workers have been allowed to file, people had questions about required documents and how the state viewed wages.
The system struggled to deal with people who had both W-2 wages from a regular job and 1099 income from contract work. An example would be someone who held a retail job, and then drove for a ridesharing service during evenings or weekends. The state will try to better explain some of the terms it is using.
“It might show in our system that you are getting full wages,” she said. “We didn’t plan for that scenario.”
Gene Tewksbury, owner of Big Sun Photography and Big Sun Photo Tours in Golden, said he started trying to file an initial claim at 5 a.m.
“I did finally get on after about four hours of hitting reload. Once I got on, it was relatively painless,” he said.
At one point the system asked if any corrections were needed before submitting the application. When Tewksbury tried to make some minor fixes, he got booted back to the beginning and lost some, but not all, of the items he had filled out.
Self-employed applicants are being asked to submit their tax returns for either 2018 or 2019. But Tewksbury said many business owners claim as many allowable expenses as they can to show as small an income number as possible. That bottom-line number on the Schedule C of the tax return is what the state uses to determine how much it will pay in claims. In Tewksbury’s case, it worked out to $213 a week.
“That’s well and good to pay for groceries, but it doesn’t do squat to keep the business going,” he said. The additional $600 a week the federal government is pitching in helps out, but that only runs through July 26. It will run out long before conventions for him to photograph will come back and tourists will feel comfortable taking his tours, he said.
At the same time the state was bringing up the new system, it also distributed the $600 a week the federal government had allocated to unemployed workers who had previously filed, Haavind said. The state’s unemployment system made its largest single direct-deposit request ever as it covered the additional federal payments retroactive to March 29.
“We actually sent a bank transfer file of $70 million Sunday night,” Haavind said.
Given that many self-employed workers have waited weeks to access unemployment benefits, one question is why more didn’t apply on Monday.
Expecting a heavy crush of applications, some might have decided to wait until later in the week. Some with multiple sources of income might have already applied for traditional unemployment benefits. Also, small business owners and the self-employed might have been approved for loans under the Paycheck Protection Program loans through the Small Business Administration.
If they did so, they aren’t eligible to also receive unemployment insurance benefits, Haavind said.