The New York Court of Appeals has ruled that Postmates couriers are employees and therefore eligible for unemployment benefits during the COVID-19 pandemic.
The ruling is actually a reinstatement of a 2015 decision, which found that former Postmates courier Luis A. Vega was eligible for unemployment benefits after he was terminated from the service. Postmates had appealed the decision. The New York Court of Appeals this month reversed it, stating, “Because there was record support for the Board’s finding that the couriers were employees, we reverse the Appellate Division order and reinstate the Board’s decision.”
The ruling states there is “substantial evidence” that Postmates “exercised control over its couriers sufficient to render them employees rather than independent contractors operating their own businesses.”
The document goes on to explain that the third-party delivery service “could not operate” without couriers, that Postmates “controls the assignment of deliveries,” and that if the courier is unavailable, Postmates, not the courier, is responsible for finding a replacement. Technology-wise, Postmates tracks deliveries in real time. However, “That the couriers retain some independence to choose their work schedule and delivery route does not mean that they have actual control over their work or the service Postmates provides its customers . . .”
All of these elements — which largely focus on how much control Postmates has over its workers — factored into the decision findings that Postmates couriers can be treated as employees, rather than contractors.
How third-party delivery companies classifies their workers is a major issue up for debate right now, and this isn’t the first time Postmates has wound up with a ruling favorable to its workers. In December, the service, along with Uber, filed a lawsuit claiming California’s Assembly Bill 5, which classifies gig workers as employees, was unconstitutional. A U.S. District Judge rejected that bid last month.
The current COVID-19 pandemic intensifies the flame under this debate, as these workers are more at risk of infection by virtue of the fact that they are out and about delivering food when the huge swaths of country are being told to stay at home. Classifying gig workers as employees, rather than contractors, means couriers would have access to paid health benefits and sick leave. At the same time, the restaurant industry is experiencing a meltdown of epic proportions, with the National Restaurant Association predicting the loss of millions of restaurant-related jobs over the next few months. With no guarantee that there will be enough demand for delivery to ensure all couriers keep their jobs, those folks driving and biking food to customers need something of their own guarantee that they’ll have access to assistance if they lose their gigs.
That, of course, means that services like Postmates would have to pony up and pay into unemployment insurance funds. In the case of this ruling, Postmates will have to contribute to New York’s Unemployment Insurance Fund. It’s entirely possible this decision will have a ripple effect, and Postmates along with other delivery services will wind up having to make similar moves in other states, too.
“Today’s decision is a huge victory for thousands of gig workers across New York,” New York Attorney Letitia General James said in a statement. “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.”
