Thousands of Massachusetts workers are flocking to the state's unemployment office for assistance as all but essential workplaces have been shuttered, but you are unlikely to find your local barber there.
Many haircutters are self-employed, and like tens of thousands of other independent contractors across the state, they are not covered by unemployment insurance.
Until about ten days ago, business was booming at a Milford hair cutting place called the Chop Shop. But when the novel coronavirus kicked into high gear, owner and barber Jake Ostreicher began to worry about the crowds gathering in his shop.
Eight guys cutting hair at once meant eight clients in chairs, plus other staff and people waiting for haircuts. Too many people for safe "social distancing."
Ostreicher talked with his barbers and told them he was going to stop cutting hair, but they could go to work if they wanted — because they’re each an independent business. They pay a weekly fee to rent their chairs.
"There’s huge benefits to being your own boss," Ostreicher told WGBH News. "Lots of great write-offs. You’re a sole proprietor and all that. But when it comes to this, you’re on your own."
Like his workers, Ostreicher is also self-employed, and doesn’t qualify for unemployment insurance because he doesn’t pay into the system.
Attorney Jill Havens is on the board of the Massachusetts Employment Lawyers Association. She said self-employed people probably could have gotten themselves into the unemployment insurance system, but it isn’t easy. And no one ever thinks that they’ll fire themselves.
"It also involves a lot of paperwork setting it up," she said. "You also have to get a payroll company to give yourself a check and withhold taxes as opposed to just, you know, receive the profits as they come in from your own business."
Havens said there could be hope. President Trump declared a national emergency to release federal funding for coronavirus response and issued disaster declarations for several states to unlock additional federal assistance. But he has not yet issued a declaration that would cover additional unemployment funds for Massachusetts.
If he does, it is possible that self-employed and contract workers would be able to get relief through the unemployment system. And Congress is also working on a $2 trillion bailout package that could include money for independent contractors.
Officials at the Massachusetts Department of Workforce Development said they have money that could be available almost immediately if the president declares an unemployment emergency.
But Dan Sichel, an economics professor at Wellesley College, said that will be an enormous need. He said nationwide, and in Massachusetts, small businesses make up ten percent of the workforce.
In 2018, the Small Business Administration reported that Massachusetts had more than 500,000 businesses with no employees.
"They make a pretty important contribution to the economy," Sichel said. "I mean, these are people doing all kinds of different jobs, ranging from carpenters, plumbers, electricians, uber drivers, people doing catering out of their home. And, so I am not 100% confident that this group of self-employed — super small businesses — is going to get covered."
And Sichel isn’t getting any clarification from the federal government. He said the U.S. Department of Labor’s webpage on Disaster Unemployment Assistance gives different criteria for “self-employed,” and there’s no certainty that every person working on their own will get help.
In the meantime, Chop Shop owner Jake Ostreicher said he is holding a fire sale.
"I guess I’m going to try to basically sell all the product I have online, to people who want it, and whatever I can get out of that I’ll divvy up between some of my barbers as like a little help," he said.
