The COVID-19 pandemic has had a major impact on anyone who has an occupation that helps to service the tourism industry and the fly fishing world is no exception. In many states such as Montana non-essential business closures mean that guides, lodges and fly shop employees are laid off or furloughed. Even after the country begins to re-open after the first wave of the pandemic begins to recede, it is likely that the impacts of the virus outbreak will have an effect that lingers deep into the spring and possibly summer months.
With unemployment spiking to record levels, several new unemployment rules have been established that can help those of us working hard to outlast the COVID-19 crisis until it is safe to travel, recreate and vacation again. These new rules will hopefully provide some relief during these troubled times as we wait out the Corona virus. Fishing guides are inherently hard working individuals that would rather put in 12 hour days than file for unemployment so this is a bit of a foreign concept for all of us. In light of the current challenges including complete closures in many states of non-essential businesses (including guiding and operating lodges and shops) unemployment benefits can protect us from serious financial hardships while we wait for the virus outbreak to ebb. Here are a few aspects of the rule changes that we have shared with our guides to help them through the next several weeks:
Independent Contractors and Self-Employed are now eligible for unemployment
This is arguably the most important change to unemployment rules for fly fishing guide operations. In the past independent contractors (such as many fishing guides) were not eligible for unemployment benefits. Under the CARES Act that passed recently this will now be changed to address the COVID-19 pandemic.
When can Independent Contractor Fishing Guides apply?
In Montana the Department of Labor is working double time to implement many of the new changes that the CARES Act changed. At the moment the MontanaWorks website is not set up to accept self employed applications. Representatives from Governor Bullock's office have recommended to still set up an account in the system and start the process even if it kicks you off. Keep checking back and hopefully within a week or two these changes will be addressed.
If I can't apply yet as an Independent Contractor how will that affect my benefits?
The Governor's office has assured us that even thought it may take a few weeks to apply as an IC. Benefits will be post dated.
How do I report my past income as an IC guide?
This is not yet clear. For employees that are laid off or furloughed your last 12 months pay is averaged (generally a weekly rate) and that is used for your benefit. In Montana the state benefit is up to 60% of your average pay for up to 26 weeks. So you should keep records of your last 12 months pay (1099s, any guide checks from early spring, etc) until this information is made clear.
Lodge owners and fly shop owners can also apply
If you own a fishing lodge or a fly shop and you are an active manager with hours reduced due to COVID-19 as a result of business closures you can also apply. Here in Montana all of our fly shops are closed (except for online orders) and our guides cannot operate trips. So for managing owners, we can apply for reduced hours and thus unemployment benefits.
Extra $600 per week benefit with CARES Act
Part of the CARES Act states that anyone receiving unemployment benefits as a result of COVID-19 will receive an extra $600 per week. This is worded that it would apply even for part time workers. This extra benefit will expire July 31st. It is possible that many employees or independent contractors would make more with unemployment benefits laid off than while working. This should also ease the minds of fly shop owners and lodges during forced closures to help slow the burn of expenses in payroll while businesses are closed while knowing their key employees will have extra benefits while not working.
If I am an IC fishing guide and I apply for the forgivable PPP loan is it better just take the added unemployment benefits?
If you are an IC guide and receive the PPP loan/grant which is forgivable, you would have to pay yourself in order for the loan to turn to a grant which then kicks you off of unemployment. Assuming that the outbreak wanes by early June AND we are operating then - you would still most likely benefit by guiding and taking the PPP if you are granted one. Under the PPP if you are operating trips you would have the income from the trips AND could keep the PPP as you are paying yourself (which allows it to be forgivable). You identify an 8 week window to record expenses that may be forgivable under the PPP. So even if you didn't guide at all in May (you could stay on unemployment then) but then started in June you could then go off of unemployment and take some of the PPP and then pay off the rest (or keep it and pay the loan portion off at 1% interest over 2 years - cheap money!). Remember you would have to guide more than 40 hours per week to get completely kicked off of unemployment. So we would recommend still applying for the PPP even if you take unemployment benefits?
If I apply for the EIDL advance can I still apply for unemployment?
Yes. If you applied for an Economic Injury Disaster Loan (EIDL) which offers up to a $10,000 advance which is forgivable you can still apply for unemployment benefits. The EIDL could be used to pay payroll later in the season when guiding starts again or for other costs like rents and mortgages related to your business. Most fishing guides will not be doing much if any guiding in April or even early May so while you aren't working you should consider the new unemployment benefit options for independent contractors and self employed.
Will laying off most of my lodge or fly shop staff increase my unemployment insurance costs?
No. Part of the CARES Act relieves businesses of the normal increases in unemployment rates if most of your staff is laid off or furloughed. So your unemployment insurance rates will not increase.
If my hours are reduced due to COVID-19 but I am still working am I eligible for unemployment?
Yes! If your hours are reduced you should be eligible. Conceivably this should also apply to independent contractor fishing guides.
Unemployment will also be extended to those that had a job lined up that fell through due to COVID-19
This is important for seasonal lodges and fly shops. If you had a contract for a lodge chef or an employment offer for a fly shop sales associate scheduled to start in April and you were forced to cancel or delay their employment, they can still collect unemployment benefits under the CARES Act. In Montana this is not yet set up in the online website application but it will be added, so be patient and give it some time. An out of state worker coming to Montana would apply via Montana since the job was here. This is very helpful as it can help keep you from losing hires that you worked hard to recruit. For example, we have delayed the opening of our Madison River Lodge until June due to COVID-19. We are able to assure our lodge team that they can use their employment contracts to apply for unemployment benefits as of the start of their original contract dates in April.
Apply for work attached unemployment if possible
If you have a job lined up after the pandemic eases you should file "work attached". If you plan to go back to a fly shop or lodge that is closed during the outbreak your state's unemployment office will check with your employer and they can affirm that you have a job to go back to after the crisis. Similarly, if you are an independent contractor guide that has lost spring trips in April and May but have bookings later in the summer you should be able to still apply work attached. If you don't apply work attached you will be required to apply for jobs every two weeks and send in evidence of your continued job search.
Consider having withholdings removed from your benefits
Unemployment benefits are taxable income. So if you do not check the option to have withholdings removed you may end up with a big tax bill next April.
I've tried the unemployment website, it keeps crashing. I try to call and can't get through
Yes. It is all definitely a s#%t show at the moment. Be patient. It may take a few weeks. The good news is when the new changes finally do go live AND you can get an application in the benefits will be back dated. There is some concern that there will not be enough money for the added benefits. The $2 Trillion dollar CARES act will run out in about a month and a half at the current burn rate. The powers that be have indicated that more funding may be coming.
Unemployment benefits are now also extended an extra 13 weeks
In Montana unemployment benefits normally last a maximum of 26 weeks. That has been extended an extra 13 weeks in the CARES Act to a total of 39 weeks
Unemployment FAQs from the Montana Department of Labor
If you are applying for Montana Unemployment (you apply where your job is not your residency) here are some fresh updates as of April 2: Montana Unemployment FAQs
Hang in there, better times will come!