We wrote about this issue several times in 2018, and now we may be about to get answer to a question that could prove critical to the growth—or stagnation—of the gig work labor pool: does performing gig work in between full-time jobs disqualify a worker from receiving unemployment benefits? The Pennsylvania Supreme Court is about to become the first state high court to decide this issue, and the country waits with bated breath to hear the answer.
There’s an old saying that out of crisis comes opportunity – and the gig economy may be on the verge of living that adage. Thanks to the two trillion-dollar Coronavirus Aid, Relief, and Economic Security Act (CARES) Act signed into law last week, the entire industry may be forever altered because independent contractors will temporarily be able to recover unemployment benefits. The Pandemic Unemployment Assistance program expands coverage under the state-by-state unemployment compensation system to individuals “not eligible for regular compensation or extended benefits under state or federal law or pandemic emergency unemployment compensation,” which includes, but is not limited to, certain gig economy workers. Who is now eligible, and what will this mean for the gig economy?
The Pennsylvania Supreme Court just agreed to weigh in on a question that could prove critical to the growth—or stagnation—of the gig work labor pool: does performing gig work in between full-time jobs disqualify a worker from receiving unemployment benefits? By accepting the case of Lowman v. Unemployment Compensation Board of Review for review yesterday, the state’s high court has decided that 2019 will be the year that it enters the fray on this crucial question.
Sure, there have been some high-profile legal setbacks for gig economy businesses in the area of misclassification lately; the Dynamex case was a punch in the gut for California businesses, and the Pimlico Plumbers case is a massive headaches for our brothers and sisters across the Atlantic. But by and large, when courts in the States are called upon to apply the standard “right to control” test in misclassification cases involving the gig economy, businesses have come out on top. And that’s exactly what happened late last week in New York as a state appellate court ruled in favor of independent contractor status for a former Postmates driver.
A state appellate court in Pennsylvania issued a ruling yesterday that should further aid the growth of the gig economy in the state, and if its reasoning is followed by courts in other states, could offer another helping hand to the nascent gig economy on a national scale. The court ruled that an unemployed man who picked up some shifts as an Uber driver did not disqualify himself from receiving unemployment benefits as a result of his gig work. This is good news for freelancers and businesses alike, as it removes one possible impediment that may have otherwise held people back from offering their services to gig economy companies.
Back in October, we reported that there appeared to be the first crack in the wall when it came to classifying Uber drivers as employees instead of independent contractors. At that time, it was reported that the New York State Department of Labor made the determination while granting the drivers unemployment benefits. We weren’t sure how much of an impact these cases would have, however, and concluded by saying “it's unclear how far worker advocates will push these decisions. If they do go to their next levels of review, it is possible for New York's appellate courts to be called upon to step into the fray.”
In a somewhat surprising but positive development for gig companies, a Florida state appellate court ruled on February 1, 2017 that Uber drivers are independent contractors, NOT employees, and therefore not entitled to unemployment compensation benefits when their working relationship with the car ride service terminates.
The New York Times reported yesterday that two Uber drivers were awarded unemployment benefits by the New York State Department of Labor. While the rulings were made earlier this summer in August and September, they had not previously been reported and are just now making news.