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I'm self-employed in California and my biggest client (>90% of my billable hours) is not able to pay due to cash flow disruptions related to Covid19. I've agreed to continue working and billing as usual, and allow them to defer all payment for at least 3 months. I'm fully aware of how dumb this sounds, but that's not my question.

The CARES act makes self-employed people like me eligible for unemployment insurance benefits. If I were not working, I would be fully eligible. If I were working a reduced number of hours, I would be eligible.

I am working, and I am billing, and I expect to probably be paid in full, someday. But I'm not currently getting paid, and I don't expect to for a while.

Do I qualify for unemployment benefits? I would appreciate any official guidance for this situation, or a recommendation on how I can find out.

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  • I imagine you figured it out by now, 4 months later -- so what happened?
    – nanoman
    Commented Aug 23, 2020 at 4:06

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Under Total and Partial Unemployment TPU 415.05 on EDD page

Self Employment or Other Work/General Section 1252 states in part:

"An individual is ‘unemployed’ in any week during which he performs no service and with respect to which no wages are payable to him, . . ."

Employment under the Unemployment Insurance Code has been defined as service performed for wages or under a contract of hire. Service is defined as performance of labor for the benefit of another or at another’s command. Therefore, a person who is self-employed, or an independent contractor is unemployed within the meaning of the Unemployment Insurance Code since such a person is not performing service for wages under any contract of hire, or at another’s command.

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    But he is performing a service with the expectation of future wages.
    – Loren Pechtel
    Commented Aug 22, 2020 at 23:09
  • This answer is confusing and doesn't squarely address the question. 1. Everything after "EDD page" is a verbatim quote from a CA state page but is not marked or linked. 2. It refers to normal CA policy but not to how it's modified by the CARES Act. 3. Beyond meeting the definition of "unemployed", there are other requirements to receive unemployment benefits (how one lost one's last job, looking for work, not receiving excessive income in other ways, etc.).
    – nanoman
    Commented Aug 23, 2020 at 3:23
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    @LorenPechtel I think the point is that self-employment or independent contractor income, even if promptly received, is not "wages" for the purpose of defining unemployment; however, this income may be relevant to qualifying for unemployment benefits.
    – nanoman
    Commented Aug 23, 2020 at 4:02

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