Unemployment benefits are usually paid out to workers who receive a W2 at the end of the calendar year. Employers typically pay into the state unemployment fund as part of their own payroll tax and this funds the state’s unemployment benefits.
As more and more Lyft and Uber drivers become full time drivers, they lost their W2 jobs and solely rely on self employed income.
During this corona virus outbreak in 2020, there are many full time W2 workers without a job. These workers will try to drive on Lyft and Uber to make some money. Lyft or Uber drivers can work part time so some wonder if they will still be eligible for unemployment if they work on Lyft and Uber.
Are you eligible for unemployment?
Normally, only workers who get a W2 from their job (either part time or full time) are eligible for unemployment benefits. However, during the year 2020, self employed contractors are able to file for unemployment. The rare exception currently is in California where you can file for unemployment benefits. It will most likely be rejected. You will then have to file a protest to get your benefits. It is unclear at this time if your protest will be upheld. Some have discussed that the Uber and Lyft TOS mentions that in order to drive on their platform, you must remain independent contractor. Some have warned that filing for benefits may lead to deactivation.
Update (3-27-2020): Due to the new stimulus bill that was signed into law on 3-27-2020, Uber and Lyft drivers will be able to file for unemployment benefits for 4 months. Each state will dictate how much you will receive per week but the stimulus package pays for at least $600 a week. The exact method of getting unemployment benefits is still being worked out in each state but here is how you would file for unemployment:
- Officially file for unemployment with your state. Below is the address for both Lyft and Uber. You will be rejected but file anyway.
- Uber
1455 Market Street
Suite 400
San Francisco, CA 94103
- Lyft
185 Berry Street
Suite 5000
San Francisco, CA 94107
- Uber
- Get your income for each month from Lyft and Uber last year BEFORE their commission. This will be your gross payment from Lyft and Uber and they typically take their commission and fees from that.
- Once unemployment asks you for more verification, send the above income statement to the unemployment agency.
State Unemployment Benefits
I have read through all of the state’s unemployment benefits. The short answer is that you won’t be able to make much money before your state starts deducting your unemployment benefits.
You can read about maximum employment benefits and part time earnings in all 50 states on this page.
- Make sure you are still eligible for unemployment. Depending on why you left your job or how much you made in each of the last four quarters, you may not be eligible for unemployment.
- Many states will allow you to earn about 25% of your weekly unemployment benefit amount (some as high as 50% or as low as 0%) before they start deducting your benefit amount, dollar for dollar
- If you earn above your weekly benefit amount, you will not be eligible for any benefits for that week, as long as you stay eligible for unemployment. There are situations where you work very few hours but earn slightly above the weekly benefit amount, which still makes you eligible for unemployment but won’t get any benefits for that week.
Which state is the most generous in terms for allowing part time income?
Here are the top five states in order of maximum income while still receiving unemployment benefits (calculated based on maximum allowable unemployment benefit. You benefit amount may vary):
- Montana (2x weekly benefit): Max of $1108 a week
- Massachusetts (1.33x weekly benefit): Max of $1025 a week
- Connecticut (1.5x weekly benefit): Max of $1144 a week
- Washington State (1.33x + $5 weekly benefit): Max of $1055 a week
- Pennsylvania (1.4x weekly benefit): Max of $802 a week
Note: Arkansas, Minnesota, New Jersey allow for the employee to earn between $600-$700 a week and still be eligible for unemployment benefits. Refer to the link above to see what the exact amount is.
Which state is the least generous in terms for allowing part time income?
Here are the bottom five states in order of maximum income while still receiving unemployment benefits (calculated based on maximum allowable unemployment benefit. You benefit amount may vary):
[Note: All of these states do not allow you to earn above state’s weekly maximum benefits]
- Arizona: $240 a week
- Louisiana (Unclear about maximum income but assume equal to maximum weekly benefit): $247 a week
- Alabama: $265 a week
- Florida: $275 a week
- Tennessee: $275 a week
Still unclear about what your total income is when factoring in part-time income and your weekly unemployment benefit? You can ask your question below in the comments!
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