New York Uber drivers classified as employees in unemployment insurance case

A New York administrative law judge has ruled that drivers who work for taxi organisation Uber are employees rather than independent contractors in a case centred around the drivers’ eligibility for unemployment benefits.

The case involves three former drivers, represented by Brooklyn Legal Services and the New York Taxi Workers Association (NYTWA), who had applied for unemployment insurance benefits. This would provide them with a temporary income while they look for work. In New York, where the case was based, unemployment insurance is funded by employer contributions, and the Department of Labor decides if an individual qualifies to receive the benefit.

The case therefore sought to determine whether Uber as an organisation was liable to contribute towards unemployment insurance, and whether the claimants involved were eligible for the benefit.

Administrative law judge Michelle Burrowes ruled that due to the level of supervision Uber exerted over its drivers, and the control the organisation had over key aspects of the service provided, this created an employer-employee relationship.

This included Uber issuing drivers with non-negotiable adhesion contracts, providing a restricted list of vehicles that drivers could use and ranking acceptable vehicles into different fare categories, and solely determining the fares charged to riders, with no input from drivers. Uber paid drivers via a weekly direct deposit service, providing weekly pay statements.

Burrowes also noted that Uber took steps to modify the drivers’ behaviour, which is typical in an employer-employee relationship. This was done using a code of conduct document which was made available to all drivers, and detailed information on what constituted acceptable behaviour while accepting fares on the Uber app. The code of conduct also included information on the consequences of not following this behaviour, for example, deactivation from the Uber app.

Burrowes said: “The overriding evidence establishes that Uber exercised sufficient supervision, direction, and control over key aspects of the services rendered by claimants such that an employer-employee relationship was created. I conclude therefore, that the claimants, and others similarly situated, are/were employees of the employer, Uber. Accordingly, I conclude that the employer is liable for contributions under the Labor Law.”

Uber intends to appeal the decision.

A spokesperson at Uber said: “We are immediately requesting a new hearing and appealing this decision. We are confident we will prevail. The Department of Labor has already ruled that several drivers are independent contractors and a Federal Court has deemed all black car drivers to be independent contractors.

“We were denied our due process rights in this matter. The administrative law judge forbid any other drivers from testifying which means the evidence was drawn from three hand-picked drivers represented by a taxi non-profit that represents only 87 drivers that partner with Uber.”

Nicole Salk, staff attorney at Brooklyn Legal Services, said: “This is an extremely important decision. It is the first unemployment insurance benefits decision, after a full hearing, regarding Uber drivers in New York state. Based on extensive evidence and a full record, administrative law judge Burrowes decided that Uber exercised substantial supervision, direction and control over three former Uber drivers who were the claimants in the case. All three drivers found themselves unemployed due to vastly different circumstances but the level of control exerted over drivers by Uber was identical, and the judge agreed with previous NYS Department of Labor determination of these drivers as employees.

“The case is far reaching because it applies not just to the three Uber drivers in question but to ‘others similarly situated’. There is no difference between these drivers and other drivers for Uber. Now Uber will have to make unemployment contributions to the state for these workers and we believe it owes the state contributions for every Uber driver.”

NYTWA had not replied to a request for comment at the time of publication.