Posted April 3, 20209:13 am
Scott O’Con knew, even in the early days of the novel coronavirus in Ohio, that his Tours of Clevelandbusiness could be hard-hit by economic fallout from the pandemic.
Tourists account for about 60% of his business providing walking tours of Cleveland. With travel slowed to a trickle, O’Con tried to generate business by offering discounts, but it didn’t appear promising. Then, the DeWine administration’s stay-at-home order shut down all but essential businesses. Now, he has little money coming in.
Congress passed the Coronavirus Aid, Relief and Economic Security Act, or CARES Act, on March 27 to help people like O’Con. In addition to $1,200 payments to many income-tax filers, the $2 trillion stimulus package extends unemployment insurance to gig economy workers, independent contractors and others who are self-employed. Such workers previously hadn’t been eligible for unemployment insurance, or UI, benefits. O’Con, who now is eligible for UI because he runs a one-person business, doubts he’ll qualify because of concerns about requirements for documenting the declines due to the coronavirus.
“As a sole proprietor, I don't know if it is going to help me,” he said of CARES. “I don't have a salary.”
He tries to put most money back into the business, but sometimes “if we need money in the household, then I’ll use it there.”
“I don’t know how they would calculate all that,” he said.
The Ohio Department of Job and Family Services doesn’t yet know what documentation will be needed to apply for such extended benefits, which are known as Pandemic Unemployment Assistance, or PUA. They include $600 a week in addition to the regular amount a worker would have received in UI, which averages about $380 weekly in Ohio, according to ODJFS. The pandemic assistance also includes an additional 13 weeks of UI to the 26 weeks currently allowed. Also, ODJFS says “it is our understanding” that PUA will cover those who can’t meet Ohio’s requirement of averaging at least $269 a week for 20 weeks during a determined period.
The ODJFS is waiting on direction from the Labor Department on specific requirements and other details relating to PUA, said Bret Crow, ODJFS’ communications director.
“Once they are up and running, retroactive benefits will be provided,” he wrote in an email. “We will share more information as soon as we have it.”
He said ODJFS is sending a letter to self-employed people who have filed claims.
“Unlike regular benefits, which rely on employers’ reported earnings for each employee quarterly, PUA relies on individual income tax records and proof of employment provided by claimants,” the letter states.
Like O’Con, Barbara Turoczy, who owns Waggin’ Tails Custom Pet Service in Strongsville, fears the UI guidelines won’t be tailored to the realities of sole proprietors like her. She could use the money. In business for 18 years, Turoczy had about 20 steady clients that she provided services for, ranging from dog walking to pet-sitting in clients’ homes.
“My livelihood was killed by this virus,” she said. “Just about everybody canceled,” she said. “I have some very wonderful clients, who have continued to help us through this, by continuing to pay.”
Even after the stay-at-home order is lifted, Turoczy fears her business won’t immediately bounce back. Clients have already canceled summer vacations, which was a busy season for her business. She also fears clients will no longer want the in-home services she provides due to concerns about spreading coronavirus.
CARES provides small-business loans, but Turoczy and O’Con doubt if they are tailored for businesses like theirs. Their concerns include a requirement for documenting income as well as not wanting to incur debt.
Kevin Johnson, who is board chairman at COSE in Greater Cleveland and on the board of trustees of the National Small Business Association, said the loans could be a lifesaver, especially for businesses with fewer than 100 employees, who want to keep these employees on the payroll. Losing employees already trained in how a business operates could be disastrous, he said. Johnson said CARES provides for such loans to be converted into grants if regulations are followed. He said this provision is essential.
“I can guarantee you that small businesses will not be able to pay this money back if they had to,” he said. “They're trying to survive.”
So is Stu Friedman. He was a real estate development consultant until he had to close his business last year. He’s been a Lyft driver since last fall, and fears UI guidelines will not be able to adequately capture such gig economy work.
“Still, I’m hoping that it will,” Friedman said. “Little by little, my Lyft work has greatly diminished.”
Rick Miller works several independent contractor jobs to survive, including those for a charity fundraising firm and a company selling gutters. Because these jobs are often seasonal, he believes he won’t qualify under CARES. However, a part-time job restocking newspapers, magazines and books at supermarkets is now providing him with full-time hours.
“I’m getting more hours, but I’m also getting more exposure to COVID-19,” he said. “I'm trying to social distance, trying to keep clean and sanitized, and I'm in-and-out of these stores so quick [to limit contact with people] that I'm working up a sweat.”
Janet Macoska is a freelance photographer whose clients include MGM Northfield Park, the Rock & Roll Hall of Fame and the Tri-C JazzFest. She said that since work has dried up due to the coronavirus, she has had to rely on her family for support. Macoska has been able to sell some of her work from a 46-year archive of photos for upcoming books on David Bowie and Bruce Springsteen, but payment may be months off. She’s had difficulty filing for UI because the website, unemployment.ohio.gov, has been crashing and she hasn’t been able to get through at 1-877-644-6562.
The ODJFS acknowledges such delays, which have been caused by volume — a record-breaking 272,117 people filed for jobless benefits for the week ending March 28. Though 300 ODJFS employees have been reassigned to take calls, it’s best to file online, according to the department.
Macoska is more hopeful about the $1,200 payment to tax filers, but with reservations.
“I know that’s not going to go very far,” she said. “So while I appreciate it, it’s like putting a Band-Aid on a big gaping wound.”
Meanwhile, the Legal Aid Society of Cleveland is gearing up in response to the spike in jobless claims.
“Immediately prior to this, we actually had not had a ton of unemployment cases coming in,” said Julie Cortes, supervising attorney of the economic justice unit. “Unemployment was so low, and the economy was humming along. I suspect we will certainly see a shift in that low number of cases.”
For information about Legal Aid’s coronavirus resources: lasclev.org/coronavirus