New York: Appellate Court Gives Gig Economy Business a Victory in Fight Against Claims of Independent Contractor Misclassification

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June 22, 2018

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In another victory for a “gig” economy business, delivery service coordinator, Postmates, successfully defended itself against a claim of independent contractor misclassification. In Matter of Vega, New York’s Third Department Appellate Court stated that a courier working in delivery services for Postmates’ food delivery service was correctly classified as an independent contractor for unemployment insurance purposes.

There, the court noted a lack of “indicia of supervision, direction, and control necessary to establish an employer-employee relationship,” citing that the independent contractor retained control on how long, when, and if he performed work for the delivery service. The court also pointed to the worker’s ability to choose transportation options, work for others, and decline delivery routes. Interestingly, the court stated that Postmates’ “incidental control” over workers, allegedly consisting of setting fees, determining pay rates, order tracking, and customer service, were not sufficient evidence of an employment relationship.

This decision further illustrates the complexity and challenges surrounding correct classifications for independent contractors. Although claims are reviewed based on the facts in each case, this ruling provides some guidance for businesses relying on independent contractor relationships.

Action Items

  1. Have independent contractor and employee relationships reviewed by legal counsel to ensure correct classification.
  2. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2018 ManagEase

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