Tuesday, July 11, 2017

Uber Drivers in New York Considered Employees

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PNN: Uber ruling in NY

The New York Unemployment Insurance Appeal Board recently ruled that three Uber drivers and “all others similarly situated” are employees, rather than independent contractors, and therefore entitled to unemployment insurance (UI) benefits. Uber has indicated it will appeal the ruling to a higher level of the Appeal Board. After that, any future appeal would be heard in state court [New York Unemployment Insurance Appeal Board, A.L.J. Case No. 016-23858, 6-9-17].

Issue of Control
The administrative law judge (ALJ) concluded that “Uber did not employ an arms’ length approach” to the drivers that would be found in an independent contractor arrangement. According to the ALJ, Uber remained involved with the means by which the drivers provided transportation services for passengers. The drivers were responsible for their own cars and associated costs. The drivers testified that Uber provided them with weekly direct deposit services, and issued weekly pay statements. The pay statements were prepared by Uber, and included the fares the drivers earned based on completed rides, deductions from the fares for Uber’s fee, and any withholdings (including payments by Uber to third-party vendors on the drivers’ behalf for leases of cars that met Uber’s standards). Uber set the base rate charged to drivers, and drivers did not negotiate the terms of Uber’s fee.

Conclusion
The ALJ concluded that the drivers were each “subjected to substantial supervision and control by Uber.” Though the ALJ found there were some indications of the drivers’ independence, “the overriding evidence establishes that Uber exercised sufficient supervision, direction, and control over key aspects of the services rendered” by the drivers, establishing an employer-employee relationship.

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