Not long after the CARES Act was signed into law in late March, entertainment industry organizations began decrying the relief package’s lack of support for mixed-income earners.
In May, around 45 organizations including SAG-AFTRA, Actors’ Equity Association and the Writers Guild of America East noted that those who receive both W-2 and 1099 income — a not uncommon situation for Hollywood workers, who move from gig to gig — were disqualified from the Pandemic Unemployment Assistance program and thereby were losing out on valuable financial aid. By August, SAG-AFTRA, The Recording Academy and 10 other industry organizations told President Trump in a letter that the lack of additional assistance for mixed-income workers was having “tragic” consequences: “Due to an unintended flaw in the CARES Act, mixed earners are often only receiving unemployment benefits of less than $100 a week — which may be only 3-10 percent of their actual pre-COVID income,” the group wrote.
Rep. Adam Schiff (D-Burbank) has been trying to fix that flaw for the last few months. In July, he and Rep. Judy Chu (D-Pasadena) introduced a bill to give these workers full access to CARES Act financial relief, and Schiff additionally included mixed-income language in the revised HEROES Act, released in September, which passed the House but had little chance in the Senate. He finally managed to pen language for mixed-income workers into the latest COVID-19 relief package, which has passed the House and Senate and is currently awaiting President Trump to sign into law.
The new package allows mixed-income earners to receive an additional $100 a week in relief on top of a $300 uptick in weekly unemployment benefits. Mixed-income earners will not receive retroactive payments for lack of PUA relief earlier in the year, though Schiff says he fought for that and included it in his July bill.
In an interview after the new relief package passed the Senate, Schiff spoke with The Hollywood Reporter about the details of the mixed-earner language, the $15 billion Save Our Stages provision that will provide relief to independent theater venues and why “the entertainment industry will be among those that are most deeply impacted” by mixed-earner relief.
First of all, can you briefly summarize for our readers what the new coronavirus relief package will be doing for mixed-income earners?
For mixed-income earners, it will provide an additional $100 a week. Mixed-income earners will also be eligible for the $300 a week supplemental federal benefit, but on top of that $100 a week to offset some of the lost compensation that they would have received if the agencies didn’t calculate unemployment based so much off of their W-2 income. So it will be helpful; I wish it could have been a lot more. We were fortunate, frankly, to have it included at all when so much of the HEROES Act fell to the cutting-room floor as we tried to take a $2.2 trillion bill and make it fit into a $900 billion package.
From your perspective, how did language involving mixed-income earners end up arriving in this coronavirus relief package as opposed to in earlier packages? This is a problem that has been reported on for months.
Well, early in the pandemic, it became apparent to me that people that were contract workers and freelancers and gig workers were going to be left out of employment compensation altogether. So I worked hard to lead an effort in the House to include this non-traditional workers in unemployment compensation benefits and we were successful. We still learned, though, that those with mixed income were getting a lot less, in some cases not getting anything at all, because their unemployment was based on their W-2 and most of their income was from 1099s. So I researched the matter, wrote a bill, introduced it to provide much greater benefits for mixed-income earners. We then fought to get that included in the revised HEROES Act that we introduced a few months ago. Of course, that legislation didn’t move because Mitch McConnell wouldn’t take it up, so when the negotiations began over the compromised bill in the Senate, I worked hard to get the mixed-income earner language that we had in the HEROES Act included in this final package. And we were successful and that’s sort of the long and short of how that happened. We had some great allies on it in the House and Senate, but I’m really thrilled that we were able to get it included because I think we probably have as many or more mixed-income earners in L.A. than just about anywhere else in the country, along with San Francisco and New York.
Besides yourself, who helped determine that language in this package — who was involved in those conversations?
I was working with Richard Neal, the chairman of the Ways and Means Committee, as well as the Speaker. On the Senate side, I know that Senator Schumer and Senator Warner, this was a priority of theirs as well. But we needed to deal with the complexity of how the states administer their unemployment compensation, so it had to be much simplified from what we had originally conceived. Otherwise, the states would have opposed its conclusion. So it was frankly weeks of negotiation and draftsmanship.
In the latest version of the bill, mixed-income earners are eligible for $100 extra per week in addition to the $300 boost they can receive on their unemployment benefits as long as they make $5,000 in self-employment income. Can you explain how you and Congress came to agree upon providing $100 extra per week to mixed-income earners in addition to the $300 boost and why $5,000 in self-employment income is the requirement for that benefit? That’s a slightly different cutoff amount than in your Mixed Earner Pandemic Unemployment Assistance Act, which was for people who have earned at least $7,250 in self-employment in 2019.
They [those figures] came about as a result of negotiation: One of the things that we’re up against is what’s the cost going to be of these revisions. We estimate, I think, that there are at least a million people that it will affect around the country and so the more generous the benefit, or the lower the limit, then the more expensive the bill becomes, in which case it becomes more difficult to get it included at all in the package. So it was a give and take and this was the result of the compromise.
Will you still be pursuing passing the Mixed Earner Pandemic Unemployment Assistance Act now that you have this language in the new coronavirus relief package?
We will be pursuing it in the new administration when there’s work on a new package to try to make sure that benefits to mixed-income workers continue. I don’t think there would be much prospect to us moving a standalone bill on the subject at this point, but we would hope to make the case with the new administration that this needs to be included in whatever package they propose.
The package includes language about a “state’s right of non-participation” when it comes to Mixed Earner Unemployment Compensation. Do you expect that certain states will opt out of participating?
I don’t think so. I think they’ll all participate, or certainly any that have a sizable number of mixed-income earners. We had to include that to avoid opposition from the states, but I think given the simplicity of the formula that we’ve arrived at — the main objection that states had was adding to their administrative burden given how difficult it’s been for them to keep pace with all of the claims to begin with. This was an issue with retroactivity, too, that if the formula was too complicated then figuring out all the retroactivity would have only added to that. So we had to make it voluntary, but we fully expect states like California to participate, and eagerly so.
Speaking of California, what effect do you expect this language on mixed-income earners have on the entertainment industry and your constituents who work in it?
I think that the entertainment industry will be among those that are most deeply impacted and most beneficially impacted by the mixed-income earner provision. So while I can certainly understand how folks wanted more and I would have liked them to get more, there’s probably no other industry that will be as largely impacted as the entertainment industry. Along those lines, I also worked hard to include the Save Our Stages Act legislation; I’m thrilled that we were successful with that. There’s probably nowhere other than New York that’s going to be as favorably impacted as L.A. by that provision as well.
You mentioned the Save Our Stages Act, which earmarks $15 billion for independent movie theaters and live venues for music or stage performances. Why was it important to create this bespoke Save Our Stages language for independent entertainment venues, rather than just allowing them to rely on PPP loans?
Well, I think the pandemic has hit certain industries harder than most others, and the theater and live-performance venues were I think the first to close. They’ll be sadly the last to reopen, and so I think they have been more devastated than just about any other industry, so there was a strong desire to make sure that they had sufficient help to get through the pandemic and a realization that many of these institutions would close and close permanently if they weren’t able to get the help. So I think that industry and the restaurant industry are uniquely among the most devastated by this pandemic.
And you expect President Trump to sign this package into law?
I do. I think the only remaining question at this point is whether he vetoes the defense bill and we have to come back for a veto override. But this one I think he’ll sign.
This interview was edited for length and clarity.