Relates to referees' hearings relating to unemployment insurance benefits involving the commercial goods transportation industry

Title of bill

An act to amend the labor law, in relation to referees' hearings relating to unemployment insurance benefits involving the commercial goods transportation industry

Purpose

This bill restricts the scope of certain determinations of an administrative law judge's determinations.

Summary of provisions

Section 1 - The bill prohibits administrative law judges presiding over unemployment benefit entitlement hearings for those involved in the commercial goods transportation industry from applying their decisions to others in the industry who are not parties to their proceedings.

Section 2 - Effective date

Justification

Labor Law section 620(1) currently allows for administrative law judges presiding over unemployment benefit hearings to apply a determination of whether a claimant was an employee or independent contractor to others who are similarly situated to the claimant. This bill would more properly reflect procedural due process protections for owners of businesses and foster a respect for the administrative hearing process by restricting such determinations to those to whom the same facts and circumstances apply. The bill also creates an exception for claimants in the commercial goods transportation industry because this industry has been the targeted focus of a movement to saddle owners of commercial goods transportation businesses with a presumption that all individuals working for them are employees, even those who are not currently claimants in the determination at issue. This campaign against business owners is encapsulated in Alexander v. FedEx (9th Cir, 2015), which held that a group of FedEx delivery drivers were employees as a matter of law for purposes of the California Labor Code, upending FedEx's business practices and creating precedent for cataclysmic financial implications plaguing otherwise thriving businesses. As a result of this decision, FedEx settled for $228 million, creating a crippling dent in the company's financial standing. Such a dramatic financial effect threatens the critical lifeline that the commercial goods transportation industry handles, such as carrying medical equipment and food supplies. Restricting the applicability of an administrative law judge's determination on a claimant's employee or independent contractor status helps preserve the industry and protects the due process rights of those not parties to the administrative proceeding.

Legislative history

New bill

Fiscal implications

None

Effective date

This act shall take effect immediately.