The New York Court of Appeals has reinstated a 2015 decision finding that food delivery service Postmates’ couriers are employees and thus are eligible for unemployment benefits during the COVID-19 pandemic.
The Unemployment Insurance Appeals Board’s original 2015 decision found that former Postmates courier Luis A. Vega should be considered an employee who is eligible for unemployment benefits after being terminated from the service. The decision meant that Postmates had to contribute to New York’s Unemployment Insurance Fund for that employee and “all other persons similarly employed.” Postmates had appealed this decision; this court has “reversed the Appellate Division order and reinstated the Board’s decision.”
The new decision comes at a critical time, as the COVID-19 pandemic has resulted in shelter-in-place restrictions and massive economic effects, including layoffs and furloughs.
In the Court of Appeals’ ruling, most of the judges supported the 2015 decision that “Postmates exercised control over its couriers sufficient to render them employees rather than independent contractors operating their own businesses.” Therefore, the company must pay unemployment insurance for these workers. The court believes that Postmates’ control created an employer-employee relationship because Postmates “dominates the significant aspects of its couriers’ work by dictating to which customers they can deliver, where to deliver the requested items, effectively limiting the time frame for delivery and controlling all aspects of pricing and payment.”
“Today’s decision is a huge victory for thousands of gig workers across New York,” NY Attorney General Letitia James said. “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. As the nation battles the spread of the coronavirus and more and more employees are laid off, Postmates drivers should know they have the same safety net millions of others in New York have today. My office will always fight for workers’ rights and to ensure every New Yorker receives the benefits they are entitled to.”
“While we do not agree with the majority opinion from the New York Court of Appeals in the matter of Vega v. Postmates, the court’s conclusions support a position for which Postmates has long advocated: we need a modern worker classification framework that is relevant to the autonomy and flexibility made possible by app-enabled work,” Postmates said. “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. As stated in the dissenting opinion, ‘Our current framework, as inconsistently applied, fails to provide clarity to anyone involved.’ We want to work with New York to change that.”
Postmates couriers and other gig workers are usually categorized as independent contractors, meaning they cannot receive unemployment benefits or health insurance. Postmates attempted to address this concern by creating a fund for couriers to use to pay for medical expenses related to COVID-19. Postmates also began using a “non-contact” meal delivery option to minimize courier exposure to the virus. Other on-demand companies, such as DoorDash and Instacart are offering 14 sick days if an illness COVID-19 related. Uber has similarly expanded its sick leave policy.