Personal Finance

Dorothea Lange | Fotosearch | Getty Images

Unemployed man stands against a vacant store on “Skid Row,” Howard Street, San Francisco, February 1937, in this photograph by Dorothea Lange.

Many of the proposals try to make the current system applicable to more workers, rather than reinvent the wheel.

For example, legislators in Washington state recently introduced a bill that would allow independent contractors who work on online platforms such as Uber to contribute to a benefits program through that platform. The funds would be managed by a nonprofit. Although the legislation focuses on workers’ compensation, Fitzpayne said it creates a “first of its kind” mechanism to provide a whole host of protections to alternative workers. “Traditional and nontraditional workers are on a level playing field when it comes to benefits,” he said.

Some states, such as Virginia, allow self-employed individuals to opt in to the unemployment insurance program if they incorporate, hire themselves as a W-2 worker and pay unemployment insurance on their wages. If your work dries up, you can file for and then collect the weekly payments as an employee.

But most states still require individuals to be searching for full-time traditional employment to qualify. This might not work for a formerly self-employed individual who wishes to remain his or her own boss. It also limits former employees from seeking opportunities outside of traditional employment.

However, nine states — Delaware, Maine, Mississippi, New Hampshire, New Jersey, New York, Oregon, Pennsylvania and Rhode Island — offer Self-Employment Assistance Programs. That’s unemployment insurance for individuals working full time to launch a business.

The Center for American Progress, the National Employment Law Project and the Georgetown Center on Poverty and Inequality have proposed requiring states to offer this program or else lose a tax benefit.

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