Uber and Lyft Drivers Win Ruling on Unemployment Benefits

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Uber and Lyft Drivers Win Ruling on Unemployment Benefits

Drivers for Uber and Lyft won a key victory in their yearslong campaign to secure traditional unemployment insurance on Tuesday, when a federal judge in New York ruled that the state must promptly begin paying them benefits.


The ruling was prompted by a lawsuit filed in late May by drivers and an advocacy group called the New York Taxi Workers Alliance, who argued that the state was taking months to pay unemployed drivers while typically processing benefits for other workers in two to three weeks.

In her ruling, Judge LaShann DeArcy Hall cited “an avoidable and inexcusable delay in the payment of unemployment insurance” to drivers.

According to the ruling, the state Department of Labor has seven days to convene and train a “work group” of several dozen staff members who will identify backlogged claims by drivers who have sought “reconsideration” after being told that they were ineligible, and take the necessary steps to pay them promptly. The state has 45 days to resolve this backlog.

Going forward, the Department of Labor must run weekly queries to identify eligible claims by drivers who are currently denied prompt payment of their benefits so they can receive them quickly.

The ruling was a preliminary injunction, meaning the court was sufficiently persuaded by the drivers’ arguments and the urgency of the situation to require the state to issue payments while the case is being litigated. The state can appeal the preliminary injunction to a higher court, and the court’s decision at the end of the trial could also reverse the preliminary decision, though that is unlikely.

A spokesman for Gov. Andrew M. Cuomo did not immediately respond to a request for comment, nor did representatives of Uber and Lyft.

The issue has become especially urgent during the pandemic, as thousands of drivers saw their incomes collapse.

In late March, Congress passed the so-called Pandemic Unemployment Assistance program to replace income for workers like contractors, who don’t qualify for traditional unemployment benefits. New York State and the ride-hailing companies have encouraged drivers to apply for this assistance.

Without the earnings data that employers typically provide the state’s Department of Labor, drivers receive a statement saying that they have no earnings on file regarding their work for Uber and Lyft, forcing them into a bureaucratic process to demonstrate their eligibility for traditional benefits that can last months.

During court proceedings, a lawyer for the state accused Uber and Lyft of playing “games” to prevent the Department of Labor from being able to obtain the relevant earnings information through an audit. He said the companies did this by initially fighting determinations of unemployment eligibility, then withdrawing their appeals, which prevented a final determination that could be used to prompt an audit.

Judge DeArcy Hall, said it appeared that if the data “is categorically made unavailable by the gamesmanship of the company, that it is incumbent upon the Department of Labor to use all the tools in its tool kit to ensure that unemployment insurance benefits are nonetheless paid.”

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