Uber Drivers Should Be Eligible for Unemployment: What’s at Stake in PA Case

This week, NELP filed an amicus brief in Lowman v. Unemployment Compensation Board of Review, a case on appeal to the Pennsylvania Supreme Court. The appellee, Donald Lowman, lost his job, then applied for unemployment compensation benefits and began driving for Uber to make extra money while he looked for permanent employment. The question presented to the Pennsylvania Supreme Court is whether Lowman’s work driving for Uber constitutes self-employment, which disqualifies a recipient from receiving unemployment benefits, or a temporary assignment, which does not.

Our amicus brief argues that there are compelling social and public policy reasons why “gig” workers like Uber drivers should be treated as employees for purposes of unemployment compensation eligibility and coverage, and Uber should be treated as an employer for purposes of unemployment compensation contributions.

First, Uber and many other so-called “online platform” or “gig” companies[1] are no different from other companies that engage workers to labor in their businesses. Uber sets most of the material terms of its drivers’ employment, including pay rates. Just like traditional employers, Uber can terminate—otherwise known as “deactivate”—its drivers’ employment. It can also unilaterally change the conditions of their work—such as reducing their pay or available work—in ways that would constitute “good cause” for leaving the Uber driving business. Uber drivers’ similarities to traditional employees make clear that there is no logical reason to exclude them from eligibility for unemployment compensation.

Uber and similarly situated online platform companies label their workers as “independent contractors” in order to avoid the benefits and protections—including unemployment compensation eligibility—that attach to employees. Yet, despite being labeled as “independent contractors,” Uber drivers are not in business for themselves.

…despite being labeled as “independent contractors,” Uber drivers are not in business for themselves.”

Second, the wholesale exclusion of Uber drivers and other “gig” or “online platform” workers from unemployment compensation, where there is no statutory exclusion, would have negative consequences for these workers and the entire Pennsylvania economy. Along with losing out on unemployment compensation’s obvious financial benefits—which kept millions of Americans out of poverty during the last recession—these workers would lose out on the system’s social benefits, such as training opportunities and work-sharing information that keep them connected to the labor market and facilitate finding a new job that matches their skill set. Moreover, excluding these workers from unemployment compensation would reduce their spending power—a loss of economic stimulus that could increase the length and severity of any future recession.

“Gig” workers need equal access to a strong social safety net, of which unemployment insurance is a necessary component. We will continue to advocate for policies that entitle workers labelled as independent contractors by their employers to the same benefits, including unemployment insurance, Social Security, and workers’ compensation, on the same terms as their fellow workers classified as employees.

[1] The U.S. Bureau of Labor Statistics (BLS) added four questions to the May 2017 Contingent Worker Supplement to measure “electronically mediated work,” which BLS defined as “short jobs or tasks that workers find through websites or mobile apps that both connect them with customers and arrange payment for the tasks,” which is the same basic definition of gig or online platform work that this brief uses. The BLS data showed that Black workers and Latino workers are overrepresented in in-person electronically mediated work, and that this type of work is more unstable than work overall (8.7 percent of in-person electronically mediated workers report that they do not expect their job to last beyond a year, compared to 3.8 percent of workers overall). More than 72 percent of electronically mediated workers are doing the work as a main job. See Bureau of Labor Statistics, U.S. Dep’t of Labor, Electronically Mediated Work: New Questions in the Contingent Worker Supplement, Monthly Labor Rev., Sep 2018, https://www.bls.gov/opub/mlr/2018/article/electronically-mediated-work-new-questions-in-the-contingent-worker-supplement.htm.