California unemployment benefits still out of reach for thousands of self-employed and gig workers

ByMichael Finney and Renee Koury via KGO logo
Wednesday, May 20, 2020
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Self-employed and gig workers are entitled to unemployment benefits thanks to the CARES Act -- but many are having a hard time submitting their applications or are seeing holdups in receiving the funds.

OAKLAND, Calif. (KGO) -- The federal CARES Act promises unemployment benefits for the first time to gig workers and the self-employed. However, the state's Employment Development Department was not set up to provide benefits for these workers -- at least not until now.

Self-employed and gig workers were relieved to hear they too could receive unemployment payments but the EDD wasn't ready to deliver -- leaving thousands still waiting for their first checks. We followed an East Bay hairstylist who came to 7 On Your Side for help.

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Just weeks ago, Alicia Orabella's Oakland hair salon was buzzing.

"I can easily do 8 or 10 or more services in a 10-hour day," Orabella told us.

Here it is Tuesday -- empty, silent, banished by a pandemic.

"Our arms are only so long; there's no way we can stand six feet or more away from a client," said Orabella.

The work she'd been doing for 24 years was suddenly illegal -- forbidden -- a public health threat. All hair salons were ordered shut, and overnight her income was gone.

"The amount of tears that were shed and sleepless nights, we're never gonna get past that," she said.

So Orabella did something she's never done before. She applied for unemployment.

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"As a self-employed individual, it's never been an option," she said.

The federal CARES Act extended benefits for the first time to gig workers and the self-employed.

But for weeks, actually getting benefits was impossible.

"We got to the part where it says are you willing and able to accept work, and I put 'no' 'cause we're in a pandemic. And that's an automatic denial," Orabella said.

The EDD application said she must be willing to work... while the state mandate said she must "not". It was a classic catch-22.

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"If I could cut hair legally with a PPE hazmat suit I would do it, because I have never wanted to do it so bad as I do now," said Orabella.

Orabella and colleagues across the country shared tips on how to get past the roadblocks -- like"click 'yes' instead of 'no.'"

There are also tricks to get through on the phone.

"As soon as the phone picks up, you hit nine," Orabella demonstrated.

"The anxiety, just not being able to work, and then the stress of logging onto a website over and over -- am I doing something wrong? We were told we would get benefits. Why aren't we getting benefits?" she asked.

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Many hairdressers wanted to give up, defy orders and cut hair on the sly -- Orabella did not.

"You have plenty of salons that are going rogue, specifically in Orange County. You've got them in Auburn. I have friends who say they drive by and see people working, and on one hand I understand... you've got family to feed and a roof over your head," Orabella said.

Instead, Orabella planned her reopening-in a new world. "I have a small salon, just two chairs, I took out my seating area," she said.

And then, hope. The EDD website opened a new portal for independent workers. Thousands swamped the website.

Last week Orabella finally got paid - through she says her friends still have not.

"That's why I felt guilty. At least I know I can pay rent June first," she said.

The EDD received 160,000 applications in the first 12 days since the portal opened for gig workers and the self-employed. EDD is promising to hire more workers to carry the load.

Take a look at more stories and videos by Michael Finney and 7 On Your Side.

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