Colorado Unemployment for Self-Employed and Gig Workers

I just listened to a great interview on the The Ross Kaminsky Show with the Executive Director of the Colorado Department of Labor and Employment, Joe Barela, about unemployment benefits in Colorado. There are still some missing answers, but here are the highlights. Please don’t take this as law as there could be some things that were not correctly spoken or documented.

• The system for allowing self-employed, independent contractors, and gig workers to apply for unemployment benefits in Colorado will be going on-line mid-April. The Department just received federal guidance on how to implement this last Sunday and are busy programming their systems to make the necessary changes.
• If you are self-employed and already applied for unemployment, you will need to apply again.
• Claims will be backdated to March 29, 2020. Therefore you will get a larger first check to make up for the back pay.
• Colorado will also implement the additional $600 federal unemployment benefit that was part of the Cares Act. This is given to anyone who is on Colorado unemployment, even if the state benefit is only $25 per week. It is not clear if the full $600, or some part of the $600, is also given to those collecting unemployment for reduced hours or reduced pay. It was not clear when that will start but it sounded imminent.
• The additional $600 per week federal benefit appears to be available to those already on unemployment before the Coronavirus and Cares Act was implemented. In other words, if you were on unemployment before the Cares Act was passed, you will still get the additional $600.
• There was some confusion about the question as to what constitutes “self-employment” income. Mr. Barela seemed to indicate it was based on gross receipts and not net income (gross receipts less expenses). They are still waiting on guidance to clarify that. The answer to this will make a huge difference to many, especially if you have ongoing expenses, but no income to pay the expenses.
• For employers who are nervous about whether their unemployment experience rate will be affected, there was some good news. During this period, the claims and resulting increase in rates will be borne by all Colorado employers. Mr. Barela referred to it as a “socialized cost” to be borne by all employers in the state. In other words, layoffs at your business will not be directly attributable to your business’ experience rating. However, rates will increase eventually. Rates will increase across all employers instead of being felt by just those employers who laid off staff.

I encourage you to contact the Colorado Department of Labor and Employment with specific questions or visit their FAQ page to clarify the points above.