There may be two possible means of obtaining financial relief for dramatists as independent contractors/self-employed individuals under the CARES Act.
The first possibility is provided under the Pandemic Unemployment Assistance program and the second is under the Payroll Protection Program. Details about each of the programs are provided below, as well as informational and practical links. Additional regulations and/or guidance about these programs are being released almost daily.
Pandemic Unemployment Assistance
The Pandemic Unemployment Assistance program is available to "covered individuals," which is an individual who provides “self-certification” that the individual is:
(I) otherwise able to work and available for work within the meaning of their applicable State law, except the individual is unemployed, partially unemployed, or unable or unavailable to work because:
(aa) the individual has been diagnosed with COVID–19 or is experiencing symptoms of COVID–19 and seeking a medical diagnosis;
(bb) a member of the individual’s household has been diagnosed with COVID–19;
(cc) the individual is providing care for a family member or a member of the individual’s household who has been diagnosed with COVID–19;
(dd) a child or other person in the household for which the individual has primary caregiving responsibility is unable to attend school or another facility that is closed as a direct result of the COVID–19 public health emergency and such school or facility care is required for the individual to work;
(ee) the individual is unable to reach the place of employment because of a quarantine imposed as a direct result of the COVID–19 public health emergency;
(ff) the individual is unable to reach the place of employment because the individual has been advised by a health care provider to self-quarantine due to concerns related to COVID–19;
(gg) the individual was scheduled to commence employment and does not have a job or is unable to reach the job as a direct result of the COVID–19 public health emergency;
(hh) the individual has become the breadwinner or major support for a household because the head of the household has died as a direct result of COVID–19;
(ii) the individual has to quit his or her job as a direct result of COVID–19;
(jj) the individual’s place of employment is closed as a direct result of the COVID–19 public health emergency; or
(kk) the individual meets any additional criteria established by the Secretary for unemployment assistance under this section;
(2) is self-employed, is seeking part-time employment, does not have sufficient work history, or otherwise would not qualify for regular unemployment or extended benefits under State or Federal law or pandemic emergency unemployment compensation under section 2107 and meets the requirements of subclause (I) (i.e., (aa) through (kk))
If playwrights are considered “covered individuals,” their loss of income from a cancelled production could potentially be covered either under section II (with incorporation of subsections (GG) or (JJ)). But note that a “covered individual” does not include:
(i) an individual who has the ability to telework with pay; or
(ii) an individual who is receiving paid sick leave or other paid leave benefits, regardless of whether the individual meets a qualification described in items (aa) through (kk), above.
This exclusion of individuals who can “telework with pay” raises the issue of how the Act may be interpreted to relate to compensation to you for cancelled productions. A dramatist’s work may have already been completed for a licensed production. Does the fact that you might be able to “telework with pay” in order to write other plays exclude you from eligibility? If you still had revisions to do for the cancelled production, and you could have been able to do that via “telework”, does that exclude you from coverage? Unfortunately, there isn't yet guidance on how these rules will extent to independent contractors (including dramatists), but the fact that dramatists could work on a play without the promise of current or possibly even future pay may not preclude them from unemployment compensation under the Act.
Length and Amount of Benefit
If the individual meets the guidelines above and applies through the individual's state unemployment regime and is approved for benefits, under the CARES Act, in addition to state unemployment benefits, the individual will be eligible to receive:
(i) an additional $600 per week (on top of the weekly state benefit) through July 31, 2020; and
(ii) an additional 13 weeks of state unemployment benefits once state benefits are exhausted, which are funded by the federal government.
Benefits Determined by each State
The calculation of the benefits is determined by each state in accordance with each state's unemployment compensation guidelines. For example, each state will have different weekly maximum amounts and different maximum benefit periods (e.g., 26 weeks). Each state also will administer its unemployment compensation program differently. It is difficult to predict what, if anything, states will require in the “self-certification” process, which is a new concept. But a dramatist’s 1099 may be the most relevant document in determining the benefit rate. If you have your 2019 tax returns, that would likely be helpful, as well as the contracts for your cancelled productions.
Recognizing that the majority of the Guild’s membership is based in either New York or California, below are some links to review in preparing to apply for unemployment benefits in those states.
Unlike New York, California has indicated that it is not yet prepared to extend unemployment benefits to independent contractors, but rather, that state agencies are still working to set up the program and the state needs additional guidance from the federal department of labor regarding implementation of such a program. Recent articles detailing this as well as a link to California's general unemployment compensation site are at the links below.
Paycheck Protection Program
Under this program, businesses with 500 or fewer employees may apply for small business loans, which will be funded by the federal government. Independent contractors/self-employed individuals would apply on their own behalf (rather than as an employer of employees). To be eligible, an applicant must certify that due to economic uncertainty caused by Covid-19, the loan is necessary to support the applicant's ongoing operations and that the applicant had ongoing operations on February 15, 2020. The program outlines the method for calculating the maximum loan amount for employers seeking loans, which is 250% of their average monthly payroll expenses.
There are questions raised for dramatists regarding this program. Do you have to use a loan-out company or some other corporate entity to be eligible? What documentation would be required to certify your ongoing operation expenses, including your “payroll”? Can the loans be used to reimburse your lost 1099 income? If they are used in that way, are the loans forgivable?
A self-employed dramatist’s eligibility for an SBA loan under this program would seem more difficult to establish than under the Pandemic Unemployment Assistance program, but given the lack of guidance regarding independent contractors under both programs, it's not clear how the rules will extend and be applied to dramatists. (See additional fact sheet from Treasury: https://home.treasury.gov/).
Here are links to additional information about this program from the U.S. Senate Committee on Small Business and Entrepreneurship (and other Federal resource links):
New York-specific links:
In light of the lack of clarity around the CARES Act, including the application of these two programs to independent contractors and the self-employed, it may make sense for dramatists to try to apply for both programs. If you apply, the Guild asks you to share your experiences with us so that we can start to accumulate the information on how the rules are being implemented, particularly across different states.
So, if you have applied to either or both of these programs, here is a survey that will help us gather the information.
And, if you have had a theatrical production cancelled as a result of the Pandemic, please let us know that too, with this form.
We are also investigating the possibility of theaters reimbursing dramatists for the lost income resulting from their cancelled productions out of the grants the theater may receive under other COVID programs, including forgivable loans to keep their staffs employed.
The information provided here reflects general business guidance based on a limited review of certain publicly available information and should not be construed or interpreted as legal advice. Given the quickly evolving situation, certain information may be inaccurate, incomplete or outdated. In applying this information to specific factual circumstances, we encourage DG members to consider seeking legal advice, especially if the potential benefits under these programs may be material to you.
Executive Director, Business Affairs
COVID-19 DG Resources Page