New York’s Highest Court Rules That Postmates Delivery Drivers

Are Employees, Eligible for Unemployment Insurance

During Coronavirus Pandemic, Decision Will Allow Drivers to Collect Unemployment Benefits

NEW YORK – New York Attorney General Letitia James today announced that the New York State Court of Appeals ruled in favor of the state and against the food-delivery app Postmates, finding that workers for the app are considered employees for purposes of unemployment benefits. The majority of judges agreed that the company's workers are not independent contractors, and Postmates is thus obligated to pay into the state’s Unemployment Insurance Fund for each employee.

“Today’s decision is a huge victory for thousands of gig workers across New York,” said Attorney General James. “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. As the nation battles the spread of the coronavirus and more and more employees are laid off, Postmates drivers should know they have the same safety net millions of others in New York have today. My office will always fight for workers’ rights and to ensure every New Yorker receives the benefits they are entitled to.”

Luis A. Vega, a former courier for Postmates, sought unemployment insurance benefits after he was terminated. When the state’s Unemployment Insurance Appeal Board sided with Vega and stated he is an employee entitled to receive unemployment insurance benefits, Postmates filed a direct appeal under the Labor Law to challenge the Board’s determination in the Appellate Division.

In ruling in favor of Vega today, the Court of Appeals agreed with the state’s argument that Postmates exercised sufficient control over the work of its couriers to create an employer-employee relationship, writing that Postmates “dominates the significant aspects of its couriers’ work by dictating to which customers they can deliver, where to deliver the requested items, effectively limiting the time frame for delivery and controlling all aspects of pricing and payment.” In reaching this conclusion, the court applied its established test for deciding whether an employment relationship exists, focusing on whether the employer exercised control over the results produced or the means used to achieve the results. The court also emphasized that the application of this test “will necessarily vary depending on the nature of the work,” explaining that Postmates’ couriers are “low-paid workers performing unskilled labor who possess limited discretion over how to do their jobs.”

This Court of Appeals’ ruling is particularly relevant today as New Yorkers and Americans across the nation battle the coronavirus disease 2019 (COVID-19), which has resulted in many workers losing their jobs and turning to unemployment insurance benefits to make ends meet.