Employment agency found in contempt of paying gig workers

After months of suffering in legal limbo, some self employed and independent contractors may receive a lifeline by Christmas.

The Department of Employment, Training and Rehabilitation has three weeks to release Pandemic Unemployment Assistance jobless benefits to more than 9,000 people the department had previously paid and later froze, a Washoe County judge ruled Thursday.

Judge Barry Breslow held the department in contempt for failing to follow his July 22 order that the agency resume paying benefits to those workers by July 28 “or shortly thereafter.” He fined the state $1,000 Thursday and warned of further punishment if the department fails by Dec. 24 to release 9,481 “start-stop” claims it froze due to concerns of potential eligibility in other benefits programs.

“Once started, payments may not be stopped,” said Breslow, doubling down on his mandate.

The fine

Andrew Stettner, senior fellow at The Century Foundation, said a ruling of this kind is a first.

“Jobless workers have a right to timely payment of jobless benefits and due process if a question is raised,” he said. “It is not just Nevada, but across the country, where workers are having benefits stopped. I have never heard of a judge issuing a fine like this, but there is no doubt it is a travesty.”

Las Vegan Dave Cherkis is still waiting to receive his unemployment benefits, after filing under the PUA program in May. The self-employed photographer said DETR should have received a heftier fine to ensure PUA filers get their money.

“It’s like putting a Band-Aid on a compound fracture—it doesn’t work,” he said. “If you’re going to fine them—fine them.”

Bradford McEwen, an independent contractor who had PUA payments frozen after receiving 21 weeks of compensation, said he was disappointed with the ruling.

“I really thought the ruling would be much more harsh towards DETR,” he said. Everybody who had their payment stopped should have received $1,000 each from DETR instead, he said.

“We should be paid for the hours, and hours, and hours on the phone. People would never have had to make any of those calls to the DETR hotlines if they just answered and picked up the phone calls to address our issues,” he said.

Waiting since May

Breslow’s order was part of a lawsuit filed in May on behalf of independent contractors and self employed workers seeking immediate payment of pending PUA claims. The July 22 order said DETR cannot stop paying claims, with some exceptions for failing to meet certain eligibility benchmarks and suspected fraud, until a worker has had a hearing or some other means of protest.

At the conclusion of the eight-hour hearing, which saw testimony from three PUA claimants, Employment Security Division employees and DETR Director Elisa Cafferata, Breslow praised state employees for their work under trying circumstances. He also conceded his previous July deadline was too short a timeframe for DETR to reasonably identify and release claims under his order.

“But it’s been four-to-five months. These people need to be paid,” he added.

Cafferata said the department was doing everything it could to comply with the order. DETR struggled to square Breslow’s order with guidance from the Department of Labor saying workers are eligible for PUA only if they are first determined ineligible for other benefits programs, like traditional unemployment insurance, state attorney Robert Whitney argued.

The guidance is clear, and DETR could lose federal funding by failing to obey, said one of the state’s witnesses, Brian Bracken, a former department employee who temporarily returned to help adjudicate claims.

‘On the fence’

Breslow contended he had already considered the labor department’s guidance in his original order, citing U.S. Supreme Court precedence as the overriding foundation of his decision.

Plaintiff attorneys argued the state had an obligation to follow the order and failed to do so. If DETR took issue with the ruling, it should’ve filed an appeal or asked for a stay, said Mark Thierman, of Reno-based Thierman Buck Law Firm.

“They didn’t take your order seriously,” he told the judge.

Breslow said he was “on the fence” but ultimately declined to extend the order to PUA workers whose claims were frozen due to concerns of fraud.

He scheduled a hearing on Dec. 31 to determine whether the department followed through on its Dec. 24 deadline.

As of Nov. 21, 74,049 Nevadans are continuing to receive jobless pay through the PUA program, and 649,615 new claims have been filed since the program rolled out in May.

Contact Mike Shoro at mshoro@reviewjournal.com or 702-387-5290. Follow @mike_shoro on Twitter. Review-Journal staff writers Subrina Hudson and Jonathan Ng contributed to this report.