New York High Court: Gig Workers Qualify for Unemployment Benefits

ALBANY, N.Y. (CN) — Food delivery drivers count as employees, not independent contractors, in New York state for the purposes of receiving unemployment, the state’s highest court ruled Thursday in the case of a Postmates delivery worker who filed for the benefits when he was fired after a week at the company.

“To put it bluntly, Postmates did not hire entrepreneurs as delivery persons, and Postmates’ attempt to create the illusion of entrepreneurialism does not transform these employees into a fleet of independent contractors,” wrote Chief Judge Janet DiFiore in the majority’s 18-page decision.

“The fact that an employer profits from unskilled labor without having to supervise a worker in the traditional sense does not render the worker an independent contractor merely by dearth of oversight.”

New York’s highest court grappled last month with the trendy and critical question crucial to the gig economy.

The subject of the case is a former Postmates delivery person named Louis Vega, who was fired when customers complained.

New York Attorney General Letitia James celebrated the decision Thursday.

“Today’s decision is a huge victory for thousands of gig workers across New York,” she said in a statement.

“The courts have solidified what we all have known for a while — delivery drivers are employees and are entitled to the same unemployment benefits other employees can obtain. As the nation battles the spread of the coronavirus and more and more employees are laid off, Postmates drivers should know they have the same safety net millions of others in New York have today. My office will always fight for workers’ rights and to ensure every New Yorker receives the benefits they are entitled to.”

Though Postmates argued Vega was an independent contractor, the New York Unemployment Insurance Appeal Board characterized him as an employee because the company exercised a significant amount of control over his work. He was granted state unemployment benefits, a reversal of an administrative judge’s decision.

“There is substantial evidence in the record to support the Board’s determination that Postmates exercised control over its couriers sufficient to render them employees rather than independent contractors operating their own businesses,” DiFiore wrote.

“While couriers decide when to log into the Postmates’ app and accept delivery jobs, the company controls the assignment of deliveries by determining which couriers have access to possible delivery jobs,” she added.

In her dissent, Justice Jenny Rivera argued that Vega chose his own hours, routes and deliveries, making him an independent contractor.

“Imagine instructing a contractor to build a house, with no specification as to the size, layout, style or features to be included (ends) or a requirement that the contractor comply with local building laws (means),” Wilson wrote. “Absent a more defined legal standard it is unclear how much control the employer may have over an independent contractor before that contractor becomes an ‘employee.’”

Postmates attorney David Cooper, of Quinn Emanuel Urquhart & Sullivan, did not immediately return a request for comment after business hours Thursday.

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