In a major victory for businesses, the NYS Appellate Division ruled that Postmates Inc. did not misclassify couriers as independent contractors. On or about June 21, 2018, the court’s decision, In the Matter of the Claim of Luis A. Vega (Respondent), Postmates Inc., (Appellant) and Commissioner of Labor (Respondent), reversed the Unemployment Insurance Appeal Board’s decision, which had found that Postmates Inc. was liable for unemployment insurance contributions to Mr. Vega and all others similarly situated. Not only would the Unemployment Insurance Appeal Board’s decision have had a significant monetary impact, it would have affected the company’s business model moving forward. The Company would have to change the classification of the delivery couriers moving forward. This could have caused many domino effects. If you have any questions regarding a Department of Labor Audit or proper classification of your workers, contact our office to speak with an employment law attorney for a confidential consultation at (800) 893-9645.
BRIEF PROCEDURAL HISTORY
This case started when a courier, Mr. Vega, filed a claim for unemployment insurance benefits after his contractor relationship with Postmates was terminated due to negative consider feedback and/or fraudulent activity. Postmates runs a web-based platform which enables customers to request pick-up and delivery service from local restaurants or stores. Mr. Vega provided services as a courier to Postmates. Mr. Vega’s unemployment insurance benefit claim initially was denied by an Administrative Law Judge but upon appeal, the Unemployment Insurance Appeal Board determined that an employer-employee relationship existed and deemed Postmates liable for additional unemployment insurance contributions on remuneration paid to Mr. Vega and all those similarly situated. Postmates filed an appeal and prevailed at the Appellate Division.