State regulators in New York have ruled that two former Uber drivers who were deactivated by the company are eligible for unemployment insurance. This indicates that the state is considering them employees and not contractors. Making its drivers contractors is a critical aspect of Uber's business model. It prevents the company from having to pay benefits, expenses or a guaranteed minimum wage.
The two drivers had filed for unemployment in 2015. After months with no resolution, on claims that are supposed to be resolved in three to six weeks, the New York Taxi Workers Alliance sued the state. One man was subsequently notified in August that he would be paid benefits of up to $420 weekly while the other man was notified that he was eligible for up to $353 weekly. Although the state's decision does not apply to all Uber drivers, many workers' advocates are still considering the result a victory.
Uber says that losing their classification as independent contractors would mean that drivers would no longer enjoy many of their freedoms including the ability to set their own hours. The company has been involved in legal proceedings in other states with drivers who have asked to be classified as employees. One California driver was awarded expenses while at least two others have received unemployment benefits.
As these cases demonstrate, employee rights can be a complex legal area, and in some cases, both employers and employees may not fully understand them. Misclassification of employees as independent contractors to avoid paying overtime wages or other costs is a common problem in some industries. People who feels that their rights are being violated in these types of cases may want to meet with an employment law attorney to see what recourse they may have.