New York Court: Uber Drivers Are Employees Eligible for Unemployment Insurance

New York Court: Uber Drivers Are Employees Eligible for Unemployment Insurance

2021-01-25 15:57:17

The New York Supreme Court, Appellate Division, Third Judicial Department ruled in late December that Uber drivers can be considered workers eligible for benefits such as unemployment insurance.

The finding confirmed two previous April 2019 decisions of the Unemployment Insurance Appeals Board stating that Uber qualifies as its drivers' employer and is liable for unemployment insurance premiums.

Uber Technologies Inc operates a smartphone app that connects customers with available drivers to pick them up and transport them to their destination. Drivers are typically considered independent contractors, and as a result they lack the same protections that regular workers receive under US labor law, such as health and unemployment insurance and work accidents.

In this case, plaintiff Colin Lowry was serving as a driver for Uber in the upstate New York market when he applied for unemployment insurance after retiring from the platform.

The New York Department of Labor initially discovered that Lowry was an Uber employee, making Uber liable for its unemployment insurance. Uber objected to the finding, but an administrative judge upheld the findings after a hearing. The Unemployment Insurance Appeals Board confirmed, and Uber appealed again.

The New York Supreme Court, in its December ruling, found evidence to support its findings that Uber exercised enough control over its drivers to enter into an employment relationship with them. This is because Uber controls driver access to their customers, calculates and collects rates, and sets the driver compensation rate.

While drivers are given the freedom to choose the route they take to transport customers, Uber provides a navigation system, tracks the location of the drivers in the app during the journey, and reserves the right to adjust the fare if the drivers take an inefficient route.

Uber also monitors the vehicle used, rules out certain driving habits, and uses its rating system to encourage and incentivize drivers to behave in a way that delivers a positive customer experience.

With this in mind, the New York Supreme Court upheld the Un Employment Insurance Appeal Board's findings that Uber has an employment relationship with its drivers, making it liable for unemployment insurance premiums.

In its ruling, the court specified that while Uber also operates a separate market in New York City, December's decision is limited to drivers in the upstate New York market, where Lowry served as an Uber driver.

Calls for classification of gig workers from coast to coast

This is not the first time that a statement like this has come from New York.

In March last year, the New York State Court of Appeals ruled that drivers for the online food delivery service Postmates Inc. workers who qualify for state unemployment insurance, Insurance Journal reported.

The decision stemmed from similar circumstances to Lowry's case and reached the highest court in New York State when Postmates sought to overturn the decision of the state's Un Employment Insurance Appeal Board in favor of the driver, Luis Vega, claiming unemployment benefits. after being fired in 2015. Postmates initially won an appeal in the state court in 2018, but lost in the New York State Court of Appeals.

Calls for app-based drivers and delivery drivers to be considered workers who qualify for things like unemployment insurance and work-related accidents, but that's not just true of New York either.

On the other coast, in California, drivers for app-based ride-hailing and delivery services filed a lawsuit this month to undo a California ballot that makes them independent contractors in lieu of employees who qualify for benefits and labor protection.

The lawsuit filed with the California Supreme Court states that Proposition 22 is unconstitutional because it limits the legislature's power to give employees the right to organize and excludes directors from being eligible for work-related accidents, the Associated Press reported.

The measure passed in November with 58% support and served as the most expensive in state history as Uber, Lyft, and other services donated $ 200 million to support it. Unions joined drivers in the lawsuit and spent about $ 20 million challenging it, according to the Associated Press.

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