CARES Act Benefits? These Advisors Are on Hold, Indefinitely

When the CARES Act became law, many travel advisors hoped it would offer a quick fix.

But it turns out that advisors looking to reap the benefits of this stimulus bill are now playing a waiting game.

In an interview with TravelAge West, Eben Peck, executive vice president of advocacy for American Society of Travel Advisors (ASTA), explained the main reason for this.

“The system is stressed, and nothing is running totally smoothly right now,” he said.

Most advisors would concur — particularly when it comes to applying for state unemployment, which is one of several avenues that agents can take to receive financial relief.  

Under the CARES Act, independent contractors (ICs) and the self-employed are now eligible to apply for unemployment benefits that are normally reserved for W-2 employees. Circumstances that must be met to receive compensation include proving that the pandemic has prohibited an IC’s ability to work.

But, advisors are finding that state unemployment programs are hard to access and, overwhelmingly, have not been updated to follow new protocol promised under the CARES Act. 

Colorado-based travel advisor Cindy Andersen, owner of Blue Shore Vacations, says that the Colorado Department of Labor and Employment is currently unable to accept applications for companies such as hers. The organization’s website states that although the CARES Act is legally in place, “those benefits are not yet available until we receive official guidance from the U.S. Department of Labor."

The phone doesn’t even ring or put me on hold; it just disconnects.

“It says that if you’re an IC — or in another profession that doesn’t normally qualify for unemployment, but does now because of the CARES Act — you should keep checking back for a new form,” Andersen said. “I’ve heard that other states are still updating, as well. I would not want to be them. What an undertaking.”

Indeed, unemployment programs — and how they’re adapting to new rules and an unprecedented influx of applications — vary widely from state to state.

The Texas Workforce Commission (TWC), which handles unemployment claims in Texas, has a notice on its website warning visitors that the department is experiencing a high volume of traffic due to COVID-19 — that is, if agents can actually access the site without receiving a 504 Gateway Timeout Error. 

Able to finally get through to the Texas application, Alicia Saba, owner of The Splendid Traveler, says that although she should qualify for benefits under the CARES Act, “the application wasn’t geared toward COVID-19 or the CARES Act, so [applying] was a bit confusing.” 

Saba is not sure when she will find out if she qualifies.

Meanwhile, Texas-based advisor Ane Lowe, owner of The Hungry Chronicles, was initially denied unemployment insurance. For a few days, she tried to get in touch with TWC.

“I was finally able to hear back from a human,” she said, noting that the representative she spoke with communicated that TWC could not approve her claim until the department had fully implemented the new programs, and that someone would contact her for more information, if necessary. 

“We’ll see how that goes,” she said.

In Iowa, advisor Whitney Shindelar, founder of Undiscovered Sunsets, applied for her financial aid through Iowa Workforce Development (IWD).

“I applied right away, around March 29, and IWD was not set up for us,” she said. “One week later, Iowa had the functionality for me to submit my 1099 tax form from last year. I did that on Sunday, so now I’m waiting to see what IWD says next.”

As opposed to the TWC website, IWD’s site states that the department is now accepting applications for CARES Act benefits. It also features a link for those who fall into the categories of self-employed workers, ICs, nonprofit employees or gig-economy workers.  

Nonetheless, the system is stressed. Shindelar, who has no idea whether her claim will be approved or how much money she might receive, has tried calling nearly every day — to no avail.

“The phone doesn’t even ring or put me on hold; it just disconnects,” she said. “It’s clear that IWD is 100% overwhelmed, which is understandable.”

California-based advisor Hope Smith, owner of Born to Travel, feels fortunate to have been able to apply for the state’s unemployment insurance, but — like her fellow advisors — she’s still waiting.

“California’s Employment Development Department emailed me, saying they received my application on April 2, and now I’m waiting for a letter that’s supposed to come in the mail by April 12,” she said.

Alternatives to Unemployment Insurance
In addition to — or instead of — unemployment insurance, advisors have opted for the SBA Economic Injury Disaster Loan Program (EIDL), which provides a $10,000 loan advance and is available to ICs and the self-employed, as well as agencies with fewer than 500 employees. Several updates to this program have been made since the coronavirus outbreak, including increased funding and wider availability across states.

The only thing now is to play the waiting game and see if I’m accepted.

Andersen is just one applicant of this program; she said the application process was straightforward, but that she hasn’t heard back for a week. Advisor Lauren Gibney, owner of Massachusetts-based Gibney Travel Inc., also described the process as straightforward, and applied to it on the advice of her accountant.

Pennsylvania-based Heather Christopher, owner of Heather Christopher Travel Consulting, also applied for EIDL. She suggests that fellow advisors apply with their accounting software open and ready to go.

Another loan option, the new Paycheck Protection Program (PPP), offers loan forgiveness for retaining employees — but the option, which flows through U.S. banks, is being met with some confusion. 

PPP was intended to launch April 3, but not all banks are ready or willing to process applications, according to ASTA’s Peck. 

“The PPP option scares me,” Christopher said. “There’s still too much unknown.” 

Gibney was able to apply for the PPP, crediting the fact that she is an S-corporation, she has filed her 2019 taxes, she does her business banking with Chase, and she has received assistance from her accountant and payroll assistant.

“The only thing now is to play the waiting game and see if I’m accepted,” she said. “And, of course, to see what needs to be done to ensure that the loan is forgivable.”

Read more from TravelAge West about the COVID-19 outbreak.