How does unemployment work for Freelancers/ Contractors?

Do individuals who aren’t traditionally employed count as being unemployed? Do freelancers who and independent contractors count as being unemployed when they are in between gigs or laid off from their ongoing contract? It’s a million-dollar question as these hard-working individuals face the same lay off’s as those who are traditionally employed in the midst of this ongoing pandemic.



The Merriam-Webster dictionary defines a contractor as:

  • “A person or company that undertakes a contract to provide materials or labor to perform a service or do a job.” Contractors could be independent or could work under a company. A freelancer while also performing services and providing labor differs from a contractor and can be defined as :
  • “A person working for different companies at different times rather than being permanently employed by one company.”


The Bureau of Labor Statistics defines unemployment as when individuals – do not have a job, have actively looked for work in the last four weeks. Individuals who have been temporarily laid off and are waiting to be called back to that job are also included in the unemployment statistics.

Other resources such as Investopedia define unemployment as – when you, as an individual, are actively seeking employment and are unable to find work. Unemployment is often used as a measure of the health of the economy. This is why governments are actively seeking out ways to reduce the unemployment rates of the countries they govern. The unemployment rate is the number of unemployed people divided the the number of people in the labor force.

The government will sometimes provide support for individuals who fall into the unemployed demographic.


Independent contractors may be found in all industries, from entertainment to construction and engineering.

Freelancers are typically hired under temporary contracts that can be renewed or not. Their income varies throughout the year and they do not receive any employee health or retirement benefits. Some people become freelancers because they wish to and prefer the lifestyle. Others have no choice and take up freelancing because they are unable to find that traditional 9-5 job. The latter set are considered unemployed as they are actively seeking employment.

So, according to the definition of unemployment, most freelancers and contractors are not unemployed but rather self-employed. Self-employed in the sense that they work for themselves, create their hours, pick their approach to a task. They have the sole power to determine their income but will usually belong to a particular income bracket. Unlike typical employees, these sets of workers have no laid out benefits. Maternity leaves, sick leaves, pension, and HMOs are not laid out for them. Anything that affects them, affects the job and income directly unless there is someone to delegate to.

Freelancers and independent contractors are also not entitled to employment aid in times of crisis neither are they protected by union laws.

However, exceptions are being made in this period where the COVID-19 has wreaked havoc in every industry. Airlines, stock markets, small businesses, freelancers and independent contractors are all facing economic hardships.


In the United States of America, the government has declared 2.2 trillion dollars as aid for all Americans. According to an article by Forbes, self-employed individuals are included in the stimulus package even though they technically cannot be termed “unemployed.” However, everyone is included in the CARES (COVID-19 Aid, Response, Economic Security Act) package to enable households and workers to stay afloat, while on lockdown.

Some of the benefits within this package extended to independent contractors and workers include:

  • Rent deferral for up to four months
  • A weekly stipend, up to $600 paid up to 4 months, for eligible individuals.

Freelancers and contractors eligible for the CARES package should log on to their state’s unemployment websites and apply as soon as possible for benefits. For freelancers and contractors in California, the site is at the Employment Development Department.


The type of unemployment benefits varies based on what state you find yourself in. Your income as an independent contractor will also matter. Benefits range anywhere from twenty to almost fifty percent of previous earnings in addition to the weekly $600 dollars stipend. There is room being made for grants for small businesses up to the sum of $10,000 that don’t have to be paid back. Tech giants such as Facebook, Twitter and Google have, also, pledged support for affected small business owners.

Our Capabilities

The best lawyers keep their cool and their sense of humor when declaring all out war
The best lawyers keep their cool and their sense of humor when declaring all out war
The veteran move is to insist on getting what you need at the scene of a car accident
The veteran move is to insist on getting what you need at the scene of a car accident
Listen as this disgusting defense lawyer exposes himself
Listen as this disgusting defense lawyer exposes himself
after watching the Jhonny Depp
After watching the Johny Depp and Amber Heard trial
Personal Injury Case
Last year I was involved in a car accident case that left me feeling hopeless and lost. Samy eased my angst and was extremely knowledgeable about car accident cases. He took his time to thoroughly explain to me step by step the process and made sure that I was aware of my rights and the...
Top dollar for my car crash
Picking my lawyer was not easy. Two guys said my case wasn’t worth it for them – Samy didnt. He took my case and helped me get my medical treatments so my back dont hurt like before. Now he gave me a lot more money than even I was hoping and I am feeling much...
Personalized support and gave me options
I needed help with a difficult employment situation due to disability accommodations. It was extremely stressful to handle. I consulted Samy and explained how I wasn’t in a headspace to handle the convos with HR anymore due to the stress and how it was making my health worse. I was ready to quit and wanted...

The House Passes Bill to Protect Federal Workers From Sexual Harassment

The House Passes Bill to Protect Federal Workers From Sexual...

How Unemployment Laws Differ in Each State

While some employees may receive severance bonuses when they leave...

MyStory Employee Rights Advocacy In The Community

Our Advocates pride ourselves in serving our nonprofit organizations, civil services organizations, and grassroots working communities across in Southern California. We offer know your rights presentations to communities of all economic, ethnic, and religious backgrounds to overview key employment rights every worker should know. If you or your organization would like to partner with Workers’ Advocate to arrange a free in-person presentation.