Illinois unemployment requests top 200K as state tells independent contractors, freelancers not to apply

Unemployment is hitting record levels in Illinois with weeks to go until the COVID-19 stay-at-home order expires. Federal action made self-employed workers eligible, but Illinois could be months away from handling their claims.

Illinois unemployment claims set another record for the week ending April 4, as the state faces continuing criticism for its inability to handle the volume created by mandated COVID-19 closures.

There were 201,041 initial claims filed the first week of April, which is more than 20 times higher than the same week a year earlier. It follows over 178,000 initial claims for the last week of March and over 114,000 claims for the week before that.

The Illinois Department of Employment Security has been overwhelmed by the demand, with workers being advised to try filing at 3 a.m. when the online system is less burdened.

The new federal stimulus package added unemployment insurance benefits for self-employed workers, such as independent contractors and gig economy workers. But those workers are being told not to even apply in Illinois at present.

It could be months before the IDES website is modified to allow these workers to apply, Illinois Senate Republican Leader Bill Brady wrote in a letter April 8 to Gov. J.B. Pritzker. He noted these workers make up 18% of Illinois’ workforce.

“Weeks ago, our constituents were told the IDES website would be improved, and access would be enhanced. However, based on what we are hearing from our constituents, delays with the site continue and frustrations continue to mount,” Brady wrote. “With the addition of gig workers, timely access to this site is even more critical, especially given the fact that we are hearing other states already have a system in place to handle these claims.”

Pritzker on April 8 was asked about speeding up Illinois’ unemployment processing by taking Canada’s approach, which delays verification to yield a three-minute online application followed by direct deposit of benefits in three days. Pritzker’s response was that Illinois had done so.

“In fact we have streamlined that. We’ve taken away the obstacles,” Pritzker said. “There had been a number of checks that somebody would have to go through before getting their unemployment insurance card. We’ve reduced the number of those checks so that people could get approved much faster.”

Pritzker said April 9 that IDES would be able to handle independent contractors and other workers not traditionally eligible for unemployment benefits in the “coming weeks,” but refused to offer a definite timeline.

IDES added staff to its call center and moved the application system to a larger software platform, but was struggling when the volume was a fraction of the most recent week’s.

Pritzker also said the state could run out of money to handle the surge of unemployment benefits. Illinois had $1.4 billion in unemployment funds in late January, according to the Chicago Tribune.

Illinois has 1.5 million workers in the industries directly impacted by the COVID-19 closure orders, or 24% of its workforce. In normal times, these industries account for $100 billion of the state’s annual gross domestic product, or $278 million per day.

Economists have predicted the economy could contract from 24% to 50% by the end of the current quarter. That could translate into a loss of between $54 billion and $113 billion to the Illinois economy.

Drastic measures have been taken to curb the pandemic in Illinois. But state leaders must also ensure they are taking emergency measures to lessen Illinoisans’ economic pain and improve the economic recovery.

Besides fixing the bottleneck in the IDES unemployment claims system, state leaders should:

• Delay commercial property tax payments, using the state’s emergency borrowing power to fill the gap for local governments
• Suspend collection of traffic fees and fines that do not impact public safety
• Remove the progressive tax question from the Nov. 3 ballot so small businesses and the state economy are not hit by $3.7 billion in new taxes just as the economic recovery is expected to begin.