March 26 (Reuters) – New York state’s highest court on Thursday ruled that drivers for online food delivery service Postmates Inc were employees eligible for unemployment insurance, which the state’s attorney general called a win for gig economy workers.
Ride hailing and delivery services say the people who drive cars and deliver packages are contractors rather than employees, making them ineligible for unemployment insurance.
The ruling by the New York State Court of Appeals in part rested on the court’s determination that contractors did not make many key decisions about their work.
“Postmates has complete control over the means by which it obtains customers, how the customer is connected to the delivery person, and whether and how its couriers are compensated,” the majority wrote.
Postmates said it disagreed with the decision but the matter showed that New York state needed a “modern worker classification framework.”
“We fully support designing a responsible framework that allows New Yorkers to choose if, when, where, and for how long they work, while also providing them access to the benefits and services they deserve,” the company said in a statement to Reuters.
The decision comes as the United States is trying to stop the spread of the coronavirus and discussing what kind of help to give to such so-called gig economy workers.
“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,” New York Attorney General Letitia James said.
Ride hailing and delivery services companies have cut or scaled back services in many cities and states due to the pandemic. Some have moved to delivering groceries and other products, despite some concerns about contracting the virus.
Earlier this week, ride services firm Uber Technologies Inc Chief Executive Officer Dara Khosrowshahi urged U.S. legislators to use the current health crisis as an opportunity to change existing employment law by creating what the company calls a “third way” between employment and contractor status. (Reporting by Nivedita Balu in Bengaluru; Editing by Aditya Soni)