With all of the local commotion about Uber coming to Rochester, New York, a timely decision has been issued by the New York State Department of Labor with respect to Uber drivers' employment status. On June 9, an administrative judge for the NY Department of Labor found that three New York-based Uber drivers and "others similarly situated" were employees, and thus eligible to receive unemployment benefits because the company exerted enough control over the drivers to establish an employer/employee relationship.
Uber argued that the drivers should be considered independent contractors rather than employees, because they set their own schedules, selected their own work areas, were not required to report absences and were not given fringe benefits.
However, the ALJ found that because the drivers were only authorized to operate vehicles approved by Uber, controlled the fares charged to passengers, prevented drivers from accepting cash, discouraged drivers from accepting tips, charged fares to credit cards stored on its app, and processed the charges itself, the drivers were actually employees. The ALJ also considered the fact that Uber required the drivers to accept 90% of ride requests.
There have been many conflicting decisions in many states regarding the employment status of Uber drivers. As always, if you have questions regarding whether a person is an employee or an independent contractor, it is important to contact legal counsel to assist with the analysis.