Gig workers win right to unemployment benefits

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New York Postmates food delivery drivers and potentially thousands of other gig workers can receive unemployment benefits at a time of historic job losses, following a ruling by the state’s highest court that they are company employees.

The New York Court of Appeals said Thursday that Postmates “could not operate” without its couriers, rejecting the company’s argument that it simply operates a platform connecting drivers to customers.

“Today’s decision is a huge victory for thousands of gig workers across New York,” said New York Attorney General Letitia James. “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.”

Postmates and other platform companies like Uber and Lyft have long claimed their workers are self-employed entrepreneurs rather than employees entitled to minimum wage, overtime, unemployment and other protections. They have vigorously contested lawsuits and legislation seeking to reclassify their workers.

The coronavirus pandemic has put unprecedented pressure on gig-economy workers. The stay-at-home orders now in force in much of the nation have sidelined vast numbers of them while others have kept driving despite the risk of spreading or catching the contagion.

The ruling on Thursday reverses a lower court decision finding Postmates wasn’t the employer of delivery driver Luis Vega, who was kicked off the platform. An administrative board had previously found that Vega was eligible for unemployment insurance benefits as a Postmates employee.

“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,” the court said.

“The Court of Appeals has confirmed what we have said all along: app-based employers have been misclassifying workers and denying them their rights for no other reason than their own bottom-line,” Mario Cilento, president of the New York State AFL-CIO, said in a statement. “The harm caused by this injustice has never been clearer than during this pandemic.”

San Francisco-based Postmates said that, while it disagreed with the decision, it was in favor of modernizing worker classifications and was willing to work with New York to achieve that.

“We fully support designing a responsible framework that allows New Yorkers to choose if, when, where, and for how long they work, while also providing them access to the benefits and services they deserve,” the company said.

Bloomberg News
Gig economy Employee benefits Workers' compensation
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