Uber, Lyft Drivers Sue NY Over Unemployment

Plaintiffs MD Islam, DOH Ouattara, Abdul Rumon, Harnek Singh, and the New York Taxi Workers Alliance filed a complaint against New York Governor Andrew Cuomo, the New York State Department of Labor, and Roberta Reardon the state’s Commissioner of Labor for the state’s failure to provide unemployment insurance (UI) and benefits to plaintiffs.

The plaintiffs filed the suit on behalf of themselves and all former Uber, Lyft, and other For-Hire Vehicle (FHV) app-based service employers. They claimed that the state failed to provide unemployment insurance to them as it does for employees of other companies in the state. They said this failure is critical during the COVID-19 pandemic, adding that “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 [this] is devastating to thousands of drivers and their families, the overwhelming majority of whom are immigrants.”

The drivers said that in 2018, New York’s Unemployment Insurance Appeals Board (UIAB) determined that Uber drivers and other similarly employed were employees for UI purposes; however, they claim that the UIAB’s decision has not changed the way the Department of Labor (DOL) “processes app-based driver’s applications for UI benefits.” Instead, the DOL “has continued to treat app-based drivers’ applications for benefits as though they are independent contractors, placing the burden on drivers to prove their earning and status.” The DOL does not require companies like Uber and Lyft to supply their earnings data, despite requiring other companies to do the same; therefore, driver benefit rates are undeterminable, which delays the benefits process. Since wages were not reported, benefits will show up as $0.00 in earnings; an employee requesting benefits must file forms and go through the process to document their wages and determine their earnings and eligibility. To qualify “the claimant must have worked and been paid wages covered by the unemployment insurance law in at least two calendar quarters…the claimant must have been paid at least $2,600 in one calendar quarter…[and] the total earnings during the base period must be at least 1.5 times the amount paid in the high quarter.” Accordingly, if a claimant believes he has been misclassified as an independent contractor, the DOL investigates the supposed misclassification to determine the claimant’s eligibility for UI. However, declaring a claimant eligible does not mean he has been approved for UI benefits.

As a result of the pandemic, there are other relief options available. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) creates the Pandemic Unemployment Assistance (PUA) program, which provides temporary relief for those unemployed as a result of the pandemic and are not eligible for their state’s UI benefits program. Therefore, “app-based drivers in New York could only be eligible for PUA if the state finds them to be independent contractors with no right to UI.”

Plaintiffs claim that between the 2018 UIAB decision and the COVID-19 pandemic the DOL found Uber and Lyft drivers to be employees, although Uber contested these findings but did not attend the UIAB hearings. Plaintiffs assert that “[b]ecause all New York City Uber drivers operate pursuant to the same uniform contracts, terms and policies, the Appeal Board’s finding of employee status for the individual claimants at issue and ‘those similarly employed’ extends to all drivers in New York City earning wages by driving for Uber.” Governor Cuomo further reiterated this idea stating that gig economy workers were employees.

As a result of the pandemic, drivers’ work has significantly dwindled and many are left unemployed and have applied for UI. However, “[d]espite having filed for UI as early as early March, many app-based drivers have still not received any unemployment benefits as of the time of this filing.” They claim they have followed DOL procedures and sent in their earning record, but plaintiffs “still received MBDs that showed no earnings in employment for UI purposes form their work for Uber and Lyft.” As a result, “by issuing zero benefit MBDs [Monetary Benefit Determinations], after receipt of drivers’ Uber and Lyft earnings records, the DOL effectively determined drivers to be independent contractors with no right to UI, in willful disregard of settled precedent.”

The plaintiffs claimed that defendants’ conduct violates Title III, the “when due” provision of the Social Security Act of 1935, and the Equal Protection Clause of the 14th Amendment of the U.S. Constitution.

The suit is filed in the Eastern District of New York. Plaintiffs are represented by South Brooklyn Legal Services.

Recently, app-based drivers have been trying to receive benefits during the COVID-19 pandemic. Lyft drivers sued the company over their failure to give drivers paid sick time, claiming they are misclassified as independent contractors.