The New York Department of Labor (NYDOL) is reportedly taking an unusually long amount of time to determine whether Uber drivers who lose their ability to drive for Uber may collect unemployment insurance benefits. This issue relates to the class action lawsuit against Uber which we have previously written about. The issue that NYDOL is grappling with is the same as the issue in that lawsuit: are Uber drivers employees or independent contractors?
Employees may be eligible for unemployment insurance benefits when they lose their jobs but independent contractors typically are not eligible. Uber maintains that its drivers are independent contractors and, so, it does not pay unemployment insurance taxes. If the NYDOL determines that ex-Uber drivers should be eligible for unemployment insurance benefits, Uber may face more litigation over whether it has to pay unemployment insurance taxes in New York.
NYDOL has been telling Ex-Uber drivers who apply for unemployment insurance benefits the following: “The information we are being given is these claims (not just yours) are under executive review, which means the Dept of Labor is not making the decision whether or not this employment is covered. Your claim will remain pending until such time as a determination has been made.”