Labor & Employment Law Daily App drivers sue New York for delay in UI benefits amid pandemic
Friday, May 29, 2020

App drivers sue New York for delay in UI benefits amid pandemic

By Pamela Wolf, J.D.

The drivers contend that it’s settled New York law that they are employees, not independent contractors, but the state Department of Labor is still not treating them as employees and doesn’t require wage data from their employers.

Four former Uber and Lyft drivers and the New York Taxi Workers Alliance (NYTWA) have filed a lawsuit in federal court against the State of New York and its Department of Labor alleging that the NYDOL’s failure to provide unemployment insurance benefits to the individual plaintiffs and all former drivers for Uber, Lyft, and other app-based service employers in a timely manner—in the same way if does for employees of other companies determined to be employers by New York State—violates their rights under the Equal Protection Clause, the Social Security Act, New York law, and Section 1983.

In the midst of the COVID-19 pandemic, the difference between receiving UI benefits in two weeks rather than two months “can determine whether an unemployed New Yorker can put food on the table,” according to the complaint. The delay “is devastating to thousands of drivers and their families, the overwhelming majority of whom are immigrants.”

App-based drivers are employees. The plaintiffs point to the New York State Unemployment Insurance Appeal Board’s (UIAB) 2018 decision determining that three Uber drivers and “any other individuals similarly employed as a driver” to be employees under the UI law (Nos. 596722-596727, July 12, 2018). The plaintiffs contend that despite these final determinations, the DOL has made no changes to the way it processes app-based drivers’ applications for UI benefits.

The DOL purportedly has continued to treat app-based drivers’ applications for benefits as though they are independent contractors, which means that the drivers bear the burden of proving their earnings and employment status. “As the DOL has not required app-based car service companies to supply their earnings data, drivers’ benefit rates cannot be determined, delaying the delivery of benefits to drivers by months,” according to the complaint.

The plaintiffs also cite the New York Court of Appeals’ recent decision finding app-based workers with similar working arrangements as app-based drivers to be employees (Matter of Vega (Postmates) (2020 NY Slip Op 02094, March 26, 2020).

Companies not required to provide wage data. Still, the DOL “has failed to require app-based companies to provide wage data, as state law empowers it to do, and is failing to timely process the UI applications of app-based drivers who have submitted their earnings data as requested,” the complaint states. “The DOL has even returned findings of $0 in wages earned in employment when drivers did fax in earnings data as requested by the DOL.”

As a result, the DOL is purportedly ignoring its own precedent and that of the state’s highest court. The plaintiffs argue that these failures delay the process for delivering benefits to drivers, often by eight weeks or more, for no “discernible reason.”

Pushed to PUA. The plaintiffs further contend that since the beginning of the COVID-19 pandemic, the DOL has found some app drivers ineligible for any unemployment insurance benefits at all, misclassifying them as independent contractors, and pushing them to apply for federal Pandemic Unemployment Assistance (PUA) instead of state unemployment benefits, further defying settled law on the matter.

Relief sought. The plaintiffs are asking the court for an order:

  • Prohibiting the defendants from misclassifying app-based drivers as independent contractors and issuing incorrect $0 MBDs to all app-based drivers in defiance of settled precedent;
  • Enjoining the defendants to immediately pay benefits to the individual plaintiffs and all app-based drivers in compliance with these statutes and in accordance with UIAB and New York State precedent;
  • Enjoining the defendants to begin requiring Uber, Lyft and other app-based for-hire vehicle employers to provide driver earnings data to New York State; and
  • Declaring that the defendants’ actions in failing to pay UI benefits to the individual plaintiffs and all app-based driver claimants in New York State, in accordance with settled precedent, violate Title III of the Social Security Act of 1935, 42 U.S.C. Sections 501-504 and the Equal Protection Clause of the 14th Amendment to the U.S. Constitution.

The plaintiffs filed their lawsuit, Islam v. Cuomo, in the Eastern District of New York; it is case No. 20-cv-2328.

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