The Uber and Lyft drivers scored a key victory Tuesday in their continued effort to be treated like other workers when a federal judge in New York ruled that the state must immediately start paying them unemployment benefits.
Many drivers have waged a long legal and political battle with companies over their employment status. Uber and Lyft have argued that drivers are independent contractors who are not entitled to standard job protections, such as a minimum wage, overtime pay, and unemployment insurance.
The companies have done everything possible to process this argument, including spending tens of millions of dollars on a voting measure that would exempt their drivers from a California law that effectively classifies them as employees.
In her ruling, Judge LaShann DeArcy Hall appeared to side with drivers in this broader debate, citing “an avoidable and inexcusable delay in paying unemployment insurance.”
The ruling was the result of a lawsuit filed in late May by drivers and an advocacy group called the New York Taxi Workers Alliance, which argued that the state was taking months to pay unemployed drivers, while it was normally processing benefits for others. workers in two to three weeks.
Although the lawsuit was filed against the state in place of Uber and Lyft, the judge called the companies for lengthy delay tactics that had made it difficult for drivers to receive the benefits due to them.
According to the ruling, the state Department of Labor has seven days to convene and train a “task force” of several dozen staff members who will identify overdue claims from drivers who have sought “reconsideration” after They were told they were not eligible, and to take the necessary steps to pay them on time. The state has 45 days to resolve this delay.
Bhairavi Desai, executive director of the taxi workers group, said thousands of drivers were in this position. The judge gave the state 14 days to report the number.
Going forward, the Department of Labor should conduct weekly consultations to identify eligible claims for drivers who are currently denied immediate payment of their benefits so they can receive them quickly.
The ruling was a preliminary court order, meaning the court was sufficiently persuaded by the drivers’ arguments and the urgency of the situation to demand that the state speed up payments while the case is being litigated. The state can appeal the preliminary court order to a higher court, and the court’s decision at the end of the trial could also reverse the preliminary decision, although that is unlikely.
“We are closely reviewing the decision and considering all of our options,” said Deanna Cohen, a spokeswoman for the Labor Department.
The problem has become especially urgent during the pandemic, as the incomes of thousands of drivers have collapsed.
“Today’s decision is a great victory for application-based drivers in New York,” said Nicole Salk, a staff attorney at Legal Services NYC, who represents the plaintiffs.
In late March, Congress approved the so-called pandemic unemployment assistance program to replace the earnings of workers like contractors, who do not qualify for traditional unemployment benefits. New York State and transportation companies have encouraged drivers to apply for this assistance.
But the new pandemic assistance program is often much less generous than traditional full-time driver insurance, of which there are tens of thousands in New York. Previous resolutions in the state entitled drivers to traditional insurance.
Central to the case before Judge DeArcy Hall is data on driver earnings that would allow the state to process unemployment benefits quickly.
The lawsuit contends that the state has not required Uber and Lyft to submit this information, despite previous rulings. In court proceedings this month, a state attorney said Uber had cooperated with a request for data from the Labor Department, although it was unclear whether what was requested would allow the state to process benefits quickly. The lawyer said in court that the state had not yet reviewed the data.
Lyft said in May that it was working with the state to provide data, but the state attorney said at the court hearing that the company had not yet submitted data similar to what Uber provided.
Without the earnings data that employers typically provide to the state Department of Labor, drivers receive a statement saying they have no earnings recorded in connection with their work for Uber and Lyft, forcing them into a bureaucratic process to demonstrate their eligibility for traditional benefits that can last for months.
During court proceedings, the state attorney accused Uber and Lyft of playing “games” to prevent the Labor Department from obtaining the relevant earnings information through an audit. He said the companies did this by initially fighting unemployment eligibility determinations, then withdrew their appeals, preventing a final determination that could be widely applied to other drivers and could also be used to jumpstart an audit.
The ruling sheds light on the scale at which companies employed this tactic, noting that there were around 294 cases in which the state had found Uber to be an employer and that the company had appealed to 227 of them, only to abandon more. 200 of the cases. Appeals There were about 78 cases in which the state found Lyft to be an employer, and the company dropped nine of its 11 appeals, according to the ruling.
Judge DeArcy Hall said at a hearing that if the data “It is categorically not available because of the company’s gaming capabilities, which is up to the Department of Labor to use all of the tools in its toolkit to ensure that unemployment insurance benefits are paid.”
He later said that the department “has been led on the leash” by companies like Uber and Lyft, but added that “my determination on this issue is in no way a Labor Department conviction” whose guilt is still being disputed.
Alix Anfang, a Uber spokeswoman, said the company had provided all the data requested by state officials. A Lyft spokeswoman declined to comment. Neither company responded to a request for comment on the appeal tactics cited by the judge.
The lawsuit says that the state’s failure to pay drivers’ unemployment benefits quickly violates the Federal Social Security Act, which requires states to pay unemployment benefits “as quickly as administratively feasible.”
Judge DeArcy Hall endorsed this argument and said in court that “There appears to be a systemic flaw with respect to payment, immediate payment, and determination of unemployment insurance benefits with respect to those workers seeking unemployment benefits as a result of work performed” for transportation companies.
Uber and Lyft face litigation related to the employment situation issue in other states, including California and Massachusetts, which have filed lawsuits alleging that the companies are misclassifying drivers as independent contractors.
On Friday, the Pennsylvania Supreme Court upheld a ruling that an Uber driver was not self-employed for the purposes of benefit eligibility, as the company had argued, which also reinforces drivers’ claims to traditional unemployment insurance. In this state.
