Dive Brief:
- Two Uber drivers filing for unemployment benefits have been granted employee status by the New York State Department of Labor, the New York Times reports.
- Although the rulings occurred in August and September they are only now reaching the public, and apply only to unemployment insurance rather than full employee benefits. Further, the ruling applies only to the two drivers in question.
- New York State has a Joint Enforcement Task Force empowered to examine issues related to the misclassification of workers, the Times reports. Continued cases of misclassification may affect minimum wage laws in the future.
Dive Insight:
The so-called "Gig Economy" rose by taking advantage of a legal loophole which would allow companies to hire and depend on "contract workers" who could scale their services to the company and be paid outside the framework of a payroll.
The model is hardly new: distribution companies have long-depended on these workers as drivers, even if their business model depends on these employees. As "gig economy" jobs became more established, better paid and increasingly demanded, though, the Department of Labor began to take note and address some of these loopholes.
While at the federal level the department has made its position on the issue clear, stating that a "contract worker" cannot be financially dependent on the company for whom they perform a gig, the definition remains in flux at the state and local level. Part of the issue is that "dependency" can only be evaluated on a case-by-case basis, so contract workers are technically unable to act as a class.
The latest decision by the New York State Department of Labor to grant unemployment benefits to two contract workers shows an alignment with the federal interpretation, and sets an important precedent to inform the Joint Enforcement Task Force's recommendations on the issue.
After all, cabinet-level departments are mainly enforcement agencies, and will require action by state and federal legislatures before establishing a more clear, class-wide definition.
