Unemployment for the self-employed, contractors and gig workers

Why you are usually not covered

Unemployment is funded by payroll taxes your employer pays on your wages. Self-employed people and independent contractors do not have an employer paying those taxes, so income from that work does not count toward a claim.

Pandemic Unemployment Assistance covered the self-employed from 2020 to September 2021. It has ended, and no standing replacement exists.

Wages that can still count

• If you had W-2 wages in the base period, usually the first four of the last five completed quarters, they can qualify you for a claim even if you are self-employed now.
• If you had both a W-2 job and freelance income, only the W-2 wages count toward the amount. The state still requires you to report the freelance income each week you claim.
• If your last employer let you go and you then started freelancing, you can still claim based on the earlier job if you meet the other rules: you must be able and available for full-time work and actively looking.

Misclassified: called a contractor but treated as an employee

Some employers classify workers as contractors when the work is controlled like a job: set hours, tools provided, work done on the company’s terms. States apply their own tests, and some, including California, New Jersey and Massachusetts, use a strict “ABC” test that presumes you are an employee unless the employer proves otherwise.

If that describes you, file anyway and say how the work was done. The state decides your status, and a finding that you were an employee can open both unemployment and back wage claims.

Working while you claim

You must report any earnings, including gig and freelance income, for the week you earn them, not when you are paid. Most states reduce the benefit by part of your earnings and stop it at a limit. Not reporting is fraud. Ask the state how it treats freelance income before you take a gig.

What to use instead

• Interim and contract work in your field to bridge a search.
• Funding for retraining and relocation for people who lost income, if you qualify.
• Health coverage through the marketplace, with a special enrollment window after the loss of other coverage.
• A savings runway plan, so the search does not run on credit.

• Bridge income while you search
• Freelance after a layoff
• Funding for laid-off workers

Frequently asked questions

Free tools for this

• Layoff runway: how long your money will last
• Unemployment benefit estimator: about how much you could get