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PURSUANT TO LABOR LAW SECTION 511, THE NEW YORK CITY SUPPER CLUB WAS NOT THE EMPLOYER OF THE MUSICIANS, DANCERS AND OTHER PERFORMERS WHO ENTERTAINED AT THE CLUB; THEREFORE THE CLUB WAS NOT OBLIGATED TO MAKE UNEMPLOYMENT INSURANCE CONTRIBUTIONS ON BEHALF OF THE PERFORMERS (THIRD DEPT).

​The Third Department, reversing the Unemployment Insurance Appeal Board, determined that the musicians, dancers and other artists who performed at a New York City supper club (Griffs) were not employees of the club under Labor Law 511. Therefore the club was not obligated to make additional unemployment insurance contributions with respect to those performers:

Pursuant to Labor Law § 511 (1) (b) (1-a), the term employment includes “any service by a person for an employer . . . as a professional musician or a person otherwise engaged in the performing arts, and performing services as such for a . . . restaurant, night club or similar establishment unless, by written contract, such musician or person is stipulated to be an employee of another employer covered by [the Labor Law]” … . “The statute, which was designed to extend the availability of unemployment insurance and workers’ compensation benefits to those in the performing arts, creates a rebuttal presumption of employment” … — a presumption that may be rebutted by a written contract establishing that the performer in question is the employee of another covered employer … . …

… [T]he sole contested issue is whether a provision contained within the written agreements executed by the performers established that they were “employee[s] of another employer covered by [the Labor Law]” (Labor Law § 511 [1] [b] [1-a]). To that end, paragraph No. 8 of the performers’ contracts with Griffs provides, in relevant part, that Griffs “is not nor shall become [the performers’] employer, as other corporations employ them” … . Matter of Griffs Global Corp. (Commissioner of Labor), 2022 NY Slip Op 06670, Third Dept 11-23-22

Practice Point: Under Labor Law 511 the musicians, dancers and other performers who entertained at the New York City supper club were not employees of the club because their contracts stated they were employees of other corporations. Therefore, the club was not required to make unemployment insurance contributions on behalf of the performers.

 

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EVEN IF THE CONTRACT BETWEEN THE INSURER AND CLAIMANT INSURANCE BROKER INCLUDED ALL THE STATUTORY FACTORS IN LABOR LAW 511, THE BROKER WILL BE CONSIDERED AN EMPLOYEE IF THE SERVICES ACTUALLY PROVIDED BY THE BROKER ARE NOT CONSISTENT WITH THE CONTRACT PROVISIONS (THIRD DEPT).

The Third Department determined the insurance company, Paul Revere, did not demonstrate that claimant insurance broker was not an employee. Claimant was entitled to unemployment insurance benefits:

Labor Law § 511 (21) provides that “[t]he term ’employment’ shall not include the services of a licensed insurance agent or broker if,” among other things, “the services performed by the agent or broker are performed pursuant to a written contract” … that, in turn, contains seven statutorily enumerated provisions … . Here, the Board concluded that two of the seven statutory requirements were absent from the written agreement entered into between claimant and Paul Revere — specifically, provisions demonstrating that claimant was “permitted to work any hours he . . . chooses” … and was “permitted to work out of his . . . own office or home or the office of the person for whom services are performed” … . Paul Revere disagrees, contending that article XI (A) of the written contract satisfies such requirements by providing that “Paul Revere shall not exercise nor have the right to exercise direction or control over [claimant’s] time, when or how [claimant] may work, or over the activities of [claimant].”

… [W]e agree with the Board that the conclusory and sweeping language employed in article XI (A) of the contract does not satisfy the requirements of Labor Law § 511 (21) (d) (iii) and (iv). … [E]ven assuming, without deciding, that the written agreement between Paul Revere and claimant did … fulfill all of the statutory requirements, we agree with the Board’s further conclusion that the parties’ conduct was inconsistent with the provisions of Labor Law § 511 (21) and, therefore, the services performed by claimant do not fall within the statutory exclusion…. . …

… [T]he statute requires both that the contract at issue contain the seven enumerated provisions and “that the services performed by the insurance agent or broker actually be consistent with those provisions” … . Matter of Hoyt (Paul Revere Life Ins. Co.–Commissioner of Labor), 2022 NY Slip Op 06518, Third Dept 11-17-22

Practice Point: Even if the contract between the insurer and claimant insurance broker includes all the statutory provisions in Labor Law 511 (such that the broker would not be considered an employee for unemployment insurance purposes), if the services actually performed by the broker are not consistent with those contract provisions the broker may be deemed an employee eligible for benefits.

 

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GROUNDANYWHERE DRIVERS, LIKE UBER DRIVERS, ARE EMPLOYEES, NOT INDEPENDENT CONTRACTORS, ENTITLED TO UNEMPLOYMENT INSURANCE BENEFITS (THIRD DEPT).

The Third Department determined drivers who work for Groundanywhere, like the drivers who work for Uber, are employees not independent contractors, entitled to unemployment insurance benefits:

Shortly after the [Unemployment Insurance Appeal] Board’s decision here, we held that substantial evidence supported the Board’s determination that drivers for Uber Technologies, Inc in upstate New York were employees of Uber … . We find that the relationship between Groundanywhere and its drivers is not materially distinguishable from the employment relationship between Uber and its drivers. The record reflects that Groundanywhere uses a smartphone app that is essentially similar to the one used by Uber and exercises a comparable level of control over its drivers, providing substantial evidence to support the Board’s finding that claimant and other similarly situated drivers were employees entitled to unemployment insurance benefits and for whom Groundanywhere was liable for additional contributions … . The indicia of control include use of an app owned by Groundanywhere, which reviews and screens drivers’ various credentials and inspects their vehicles for compliance with its standards, provides drivers with a GPS navigation system, tests their knowledge of geography and ability to use GPS, and handles both driver and client complaints and problems that arise during the transport. Groundanywhere coordinates and oversees all aspects of the ride through its app, tracking the drivers and the ride on GPS and running a help desk for the drivers and controlling the drivers’ access to its clients. Groundanywhere sets and calculates the fares, keeps a set percent as a fee, charges the client a processing fee, adds a gratuity which, if disputed by the client, results in the driver getting a higher percent of the fare in lieu of a gratuity, collects the charges from the client and pays a percent of the base charge to the drivers, who are paid even if the client fails to show up for the trip or disputes the charges. Although drivers use and maintain their own vehicles and pay all vehicle expenses, they display a Groundanywhere logo and are reimbursed for tolls and parking costs. Clients are able to rate drivers, who are selected based upon their location, ratings and history of accepting offered fares. Matter of Hossain (Groundanywhere LLC–Commissioner of Labor), 2022 NY Slip Op 03424, Third Dept 5-26-22

Practice Point: Uber drivers, and drivers for similar outfits like Groundanywhere, are employees, not independent contractors, entitled to unemployment insurance benefits.

 

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STAFFING COMPANY WHICH SCREENED JOB APPLICANTS FOR ITS CLIENTS WAS NOT AN EMPLOYER LIABLE FOR UNEMPLOYMENT INSURANCE CONTRIBUTIONS (THIRD DEPT). ​

The Third Department, reversing the Unemployment Insurance Appeal Board, determined Strikeforce Staffing was not an employer of the persons for whom it found employment with its clients. Therefore, Strikeforce was not liable for additional unemployment insurance contributions on remuneration paid to the claimant and others similarly situated:

Strikeforce recruited job seekers for its clients, businesses in need of workers, by placing advertisements on various websites. For example, claimant completed an application on Indeed.com for a line production position at a bakery. Strikeforce would first screen a job seeker’s application to see if he or she potentially met a client’s needs and, if so, send the individual for an interview with the client. The client would make a hiring decision and, according to the testimony of the owner and operator of Strikeforce, Strikeforce clients did not hire about 30% to 40% of the applicants referred to them. If hired, the client, not Strikeforce, would provide the worker with his or her rate of pay, which the worker was free to negotiate with the client, and the worker’s schedule. * * *

As Strikeforce does not exercise any control over the manner in which the workers hired by its clients perform their services, the means used to supply those services or the results produced, we cannot find that there is substantial evidence to support the Board’s determination that Strikeforce exercised sufficient direction, supervision and control over claimant, and those similarly situated, to demonstrate an employment relationship … . Matter of Cruz (Strikeforce Staffing LLC–Commissioner of Labor), 2022 NY Slip Op 02849, Third Dept 4-28-22

Practice Point: A staffing company which screens job applicants for its clients but which exercises no supervisory control over the applicants who are hired is not liable for unemployment insurance contributions.

 

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CLAIMANT DELIVERY DRIVER WAS NOT AN EMPLOYEE OF NEL, A BUSINESS LOGISTICS COMPANY WHICH ASSIGNED CLAIMANT TO DELIVER AUTO PARTS FOR ITS CLIENT, ANY-PART AUTO STORES (THIRD DEPT).

The Third Department, reversing the Unemployment Insurance Appeal Board, determined claimant was not an employee of NEL, a business logistics company, and NEL was, therefore, not liable for unemployment insurance contributions on remuneration paid to claimant and others similarly situated. Claimant was a delivery driver who was assigned by NEL to deliver auto parts for Any-Part Auto Stores:

The record reflects that, after NEL initially referred claimant to Any-Part, NEL did not retain any supervisory authority over him. NEL did not provide any training, set delivery goals for claimant, conduct performance reviews or evaluations, require any proof of delivery or require any contact from claimant on a day-to-day basis. Any-Part assigned the deliveries to claimant and handled any complaints. Claimant used his own vehicle, NEL did not reimburse him for any expenses and claimant was not restricted from working for others. Under the parties’ written agreement, claimant could refuse an assignment, but, once he accepted an assignment, he was required to complete it. Per the agreement, claimant was permitted to hire other individuals to perform the work if claimant could not, and claimant was responsible for ensuring that those individuals comply with state and federal regulations, including licensing and insurance requirements. … . Matter of Pasini (Northeast Logistics, Inc.–Commissioner of Labor), 2022 NY Slip Op 02464, Third Dept 4-14-22

 

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CLAIMANT WAS NOT ALLOWED TO SUBMIT AS EVIDENCE A FLYER FROM THE DEPARTMENT OF LABOR WHICH INDICATED IT WAS NECESSARY TO APPLY FOR STATE UNEMPLOYMENT BENEFITS TO RECEIVE FEDERAL PANDEMIC UNEMPLOYMENT BENEFITS; THE EVIDENCE WAS RELEVANT TO WHETHER CLAIMANT WILLFULLY MISREPRESENTED HER EMPLOYMENT STATUS AND SHOULD HAVE BEEN CONSIDERED; MATTER REMITTED (THIRD DEPT).

The Third Department, reversing the Unemployment Insurance Appeal Board, determined claimant should have been allowed to present evidence that her misrepresentation that she was not employed was not willful. Based on a flyer put out by the Department of Labor, claimant allegedly believed that she needed to apply for state unemployment benefits to be eligible for federal pandemic unemployment insurance:

At the hearing, claimant requested to admit over 50 pages of documentation into the record. Included in these documents is a flyer, which claimant contends was on the Department of Labor’s website and led her to believe that, despite not being eligible for state unemployment benefits, she may have been entitled to pandemic unemployment assistance under federal legislation that was put in place due to the coronavirus pandemic. Claimant argues that she understood this flyer to mean that she was required to apply for state unemployment benefits to obtain relief under the federal legislation. A fair interpretation of the flyer supports that contention. Also included in these documents is evidence of claimant’s many attempts to contact the Department of Labor to determine whether she was, in fact, entitled to the benefits that she was receiving. As these documents bear directly on the issue of determining whether claimant’s misrepresentation was willful, as well as on claimant’s credibility, not allowing them into evidence denied her “a sufficient opportunity to present proof in support of her claim” and did, in fact, deprive her of a fair hearing … . Matter of Nottage (Commissioner of Labor), 2022 NY Slip Op 02476, Third Dept 4-14-22

Practice Point: Here a flyer put out by the Department of Labor indicated it was necessary to apply for state unemployment benefits to be eligible for federal pandemic unemployment benefits. Claimant sought to introduce the flyer in evidence to show her misrepresentation that she was not employed was not “willful.” The evidence should have been considered by the Unemployment Insurance Appeal Board.

 

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CLAIMANT WAS LAID OFF AFTER 15 YEARS BUT CONTINUED TO DO SIMILAR WORK FOR THE EMPLOYER; AFTER HE WAS LAID OFF HE WAS NO LONGER AN EMPLOYEE AND THEREFORE WAS NOT ENTITLED TO UNEMPLOYMENT INSURANCE BENEFITS (THIRD DEPT).

The Third Department, reversing the Unemployment Insurance Appeal Board, determined a photograph researcher who continued to work for a a publisher, Rosen Publishing, after he was laid off after 15 years, was not an employee and therefore was not entitled to unemployment insurance benefits:

… [W]e conclude that … the Board’s finding of an employer-employee relationship is not supported by substantial evidence. After [claimant was laid off], when a photograph research project became available, Rosen Publishing would email claimant the project’s title, the number of specs needed and the deadline for the project, which project he could accept or reject. If claimant accepted the project, an additional email with further information regarding the book’s manuscript and further detail about the project was provided. Other than the deadline for the project, claimant was not required to work any specific hours, was not required to report to Rosen Publishing at any time during the course of the project, received no fringe benefits and could have others perform the research. Claimant was not prohibited from working for competitors, there was no written contract and he was not reimbursed for any expenses, nor was he provided with any equipment to perform his research. Matter of Levick (Rosen Publ. Group Inc.–Commissioner of Labor), 2021 NY Slip Op 06890, Third Dept 12-9-21

 

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CLAIMANT ACTOR WAS NOT AN EMPLOYEE OF THE SCHOOL OF VISUAL ARTS AND THEREFORE WAS NOT ENTITLED TO UNEMPLOYMENT INSURANCE BENEFITS (THIRD DEPT).

The Third Department, reversing the Unemployment Insurance Appeal Board, determined claimant actor was not an employee of the School of Visual Arts (SVA). Claimant was paid $10 an hour for a couple of acting jobs at SVA:

Claimant, a professional actor who maintained his own website and IMDb listing to showcase his acting experience and credentials, was referred for the two assignments at issue by an SVA faculty member. Claimant readily acknowledged that he only provided services for SVA once or twice a year, that he was free to provide similar services for other entities, that he could decline to participate in SVA projects for any reason, that he signed a written invoice proclaiming his status as an independent contractor and that no deductions were taken from his pay. Although claimant insisted, contrary to the testimony offered by SVA’s representative, that the scripts provided to him were not authored — and the scenes in which he appeared were not directed — by students, a closer reading of claimant’s testimony nonetheless reveals that the “direction” that he purportedly received from SVA faculty members was minimal and for the purpose of teaching students how to direct. In short, despite other possible indicia of an employment relationship, the record as a whole does not demonstrate that SVA exercised overall control over important aspects of the professional services offered by claimant … . Matter of Ewens (School of Visual Arts, LLC–Commissioner of Labor), 2021 NY Slip Op 06894, Third Dept 12-9-21

 

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CLAIMANT’S UNEMPLOYMENT INSURANCE BENEFITS PROPERLY REDUCED TO ZERO BECAUSE CLAIMANT’S PENSION EXCEEDED THE AMOUNT OF THE BENEFITS (THIRD DEPT).

The Third Department determined the amount of unemployment insurance benefits for claimant, a professional violinist, was properly reduced to zero based upon claimant’s pension:

Consistent with the provisions of Labor Law § 600 (1) (a), the benefit rate of a claimant who is receiving a governmental or other pension “shall be reduced . . . if such [pension] payment is made under a plan maintained or contributed to by [the] base period employer and . . . the claimant’s employment with, or remuneration from, such employer after the beginning of the base period . . . increased the amount of . . . such pension” … . “Under the plain language of the statute, the specified reduction shall be made where a claimant’s base period employer made a pension fund contribution during the base period which increased the claimant’s pension” … .

… [T]he record establishes that, during the relevant base period, claimant received a pension benefit that, in turn, was fully funded by the contributing employers. The record further makes clear — and claimant does not dispute — that the work performed by her during the base period and the corresponding contributions made by her employers increased the monetary value of her pension. Under these circumstances, and given that the prorated weekly amount of claimant’s pension benefit exceeded her weekly unemployment insurance benefit (see Labor Law § 600 [1] [b]), the statutory reduction was triggered, and claimant’s unemployment insurance benefit rate was properly reduced to zero … . Matter of Morganstern (Commissioner of Labor), 2021 NY Slip Op 06416, Third Dept 11-18-21

 

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CLAIMANT, A MEMBER OF THE CITY BOARD OF ASSESSMENT AND REVIEW (BAR) HIRED TO REVIEW THE FAIRNESS OF PROPERTY TAX ASSESSMENTS, WAS NOT AN EMPLOYEE OF THE CITY AND THEREFORE WAS NOT ELIBIBLE FOR UNEMPLOYMENT INSURANCE BENEFITS (THIRD DEPT).

The Third Department, reversing the Unemployment Insurance Appeal Board, determined claimant, a City Board of Assessment and Review (BAR) member, was not an employee of the city and therefore was not entitled to unemployment insurance benefits. BAR members determine the fairness of property tax assessments:

… [C]laimant acknowledged … that neither the City Assessor nor any other City entity has control over BAR’s review and determination of grievances or the means by which such determinations are reached (see RPTL 523, 525, 526). Rather, the City Assessor merely provides BAR with the necessary property information, and once BAR reaches its determination, the role of the City Assessor is limited to adjusting the tentative assessment roll — as necessary — before the assessment roll is finalized (see RPTL 526 [5]). Notably, although the City Assessor could return a determination to BAR to correct “technical” errors, the City Assessor could not alter or modify the determination reached by BAR (see RPTL 526 [5]). Finally, the record reflects that the City Assessor could neither sanction nor terminate a member of BAR.

Based upon the foregoing, the Board’s finding of an employment relationship is not supported by substantial evidence. Matter of McLaughlin (City of Albany–Commissioner of Labor), 2021 NY Slip Op 06119, Third Dept 11-10-21

 

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