In the Matter of Yoga Vida NYC, Inc., Appellant. Commissioner of Labor, Respondent.

Brief

N.Y.September 6, 2016

COURT OF APPEALS STATE OF NEW YORK ----------------------------------------------------)( In the Matter of YOGA VIDA NYC, INC., Appellant, - against- COMMISSIONER OF LABOR, Respondent. ----------------------------------------------------)( APL-2014-00285 BRIEF OF AMICUS CURIAE THE LEGAL AID SOCIETY IN SUPPORT OF RESPONDENT COMMISSIONER OF LABOR SEYMOUR JAMES ADRIENE HOLDER KAREN CACACE RICHARD BLUM The Legal Aid Society Employment Law Unit 199 Water Street. 3'd Floor New York. NY I 0038 (212) 577-3648 Counsel for The Legal Aid Society TABLE OF CONTENTS STATEMENT OF INTEREST OF AMICUS ...................................................... 1 SUMMARY OF ARGUMENT ........................................................................... 3 ARGUMENT ....................................................................................................... 5 I. LOW-WAGE WORKERS OF ALL VARIETIES RELY ON UNEMPLOYMENT INSURANCE TO A VOID DESTITUTION WHEN THEY LOSE THEIR JOBS .......................................................... 5 A. Low-Wage Workers Can Be Found in a Wide Range of Jobs ............................................................................................. 5 B. Without Unemployment Insurance, Low-Wage Workers Often Face Immediate and Severe Crises .................................. 6 II. MISCLASSIFICATION OF WORKERS UNDERMINES THE REMEDIAL PURPOSES OF THE UNEMPLOYMENT INSURANCE LAW AND PRESENTS A SIGNIFICANT THREAT TO LOW-WAGE WORKERS' ECONOMIC SECURITY ................................................................................................ 8 A. New York Unemployment Insurance Law is a Remedial Statute Intended to Protect Workers Against the Financial Crises that Would Otherwise Accompany Losing Their Jobs ............................................................................................. 8 B. Misclassification is a Frequent Problem Facing Low- Wage Workers ............................................................................ 9 III. WHEN ANALYZING CONTROL, COURTS SHOULD BE ESPECIALLY SKEPTICAL OF CLAIMS OF INDEPENDENCE WHEN WORKERS ARE PERFORMING FUNCTIONS THAT ARE INTEGRAL TO THE BUSINESS AT ISSUE AND THEY SHOULD LOOK CRITICALLY BEHIND FACTORS THAT REFLECT THE BARGAINING POWER OF TE BUSINESS MORE THAN ANY REAL INDEPENDENCE OF THE WORKERS .............................................................................................. 12 A. Workers Who Perfonn Core Functions of a Business Should Rarely Be Found To Be Genuinely Independent of the Business for the Purposes of the Unemployment Insurance Law .......................................................................... 12 1 TABLE OF CONTENTS (continued) B. Factors that Reflect Uneven Bargaining Power and Control By a Business Over Workers Should Not Be Seen as Establishing that Workers Are Independent and Not Employees ......................................................................... 15 C. The Appellate Division Was Correct in Affirming the Decision of the Unemployment Insurance Appeal Board in this Case ............................................................................... 19 CONCLUSION .................................................................................................. 22 ii TABLE OF AUTHORITIES Cases Ansoumana v. Gristedes, 255 F. Supp. 2d 184 (S.D.N.Y. 2003) ................................................................ 11 Matter of Columbia Artists Mgmt. LLC (Commissioner of Labor), 109 A.D.3d 1055 (3d Dep't 2013) ..................................................................... 17 Matter of Empire State Towing & Recovery Assn., Inc. (Commissioner of Labor), 15 N.Y.3d 433 (2010) ........................................................................................ 18 Matter of Encore Music Lessons LLC (Commissioner of Labor), 128 A.D.3d 1313 (3d Dep't 2015) ..................................................................... 18 Matter of Ferrara (Catherwood), 10 N.Y.2d 1 (1961) .............................................................................................. 8 Matter of Kelly (Frank Gallo, Inc. -Commissioner of Labor), 28 A.D.3d I 044 (3d Dep't 2006), leave to appeal dismissed, 7 N.Y.3d 844 (2006) ............................................................................................. 17 Matter of Langford (Transportation Planning Co. - Commissioner of Labor), 282 A.D.2d 804 (3d Dep't 2001) ....................................................................... 17 Matter of Machcinski (Ford Motor Co.), 277 A.D. 634 (3d Dep't 1951) ............................................................................. 8 Matter of Nance (NYP Holdings Inc.- Commissioner a,[ Labor), 117 A.D.3d 1294 (3d Dep't 2014) ............................................................... 14, 16 Matter of 0 'Connor (2020 Powervision. Ltd. -Commissioner of Labor), 67 A.D.3d 1302 (3d Dep't 2009) ....................................................................... 16 Matter of Priester (City & Suburban Delivery Sys. -Commissioner of Labor), 273 A.D.2d 654 (3d Dep't 2000) ....................................................................... 16 Ill Matter of Ramirez (Propoint Graphics LLC- Commissioner of Labor}, 127 A.D.3d 1295 (3d Dep't 2015) ..................................................................... 16 Matter of Rivera (State Line Delive1y Service, Inc.- Roberts}, 69 N.Y.2d 679 (1986), cert. denied, 481 U.S. 1049 ( 1987) .............................. 16 Matter of Ross (Majestic Messenger Service- Roberts), 119 A.D.2d 857 (3d Dep't 1986) ....................................................................... 16 Matter of Stuckelman (Blodnick, Gordon, Fletcher & Sibell, P. C. - Commissioner of Labor), 16 A.D.3d 882 (3d Dep't 2005) ......................................................................... 17 Matter of Wells (Madison Consulting, Inc. -Commissioner of Labor), 77 A.D.3d 993 (3d Dep't 2010) ......................................................................... 16 Matter of Yoga Vida NYC. Inc. (Commissioner of Labor), 119A.D.3d 1314(3dDep't2014) ......................................................... 12, 19,20 Statutes Labor Law§ 193 ............................................................................................... 17, 20 Labor Law§ 500 et seq ......................................................................................... 1, 8 Other Authorities 22 NYCRR § 500.23 ................................................................................................. 2 Barbara Sard, Center on Budget Policy and Priorities, Number of Homeless Families Climbing Due to Recession (Jan. 8, 2009), http://vvww.cbpp.org/research/number-of-homeless-families- climbing-due-to-recession .................................................................................... 7 Department of Investigation, Swnmm:v ofEvictions. Possessions & Ejectments Conducted (Jan. 22, 20 15), http://cwtfhc.org/wp- content/uploads/20 15/03/Evictions-by-Marshal-20 14-_-DO I. pdf.. ..................... 7 IV United States Dep't of Labor, Wage and Hour Division, Administrator's Interpretation No. 2015-1, July 15, 2015, Subject: The Application of the Fair Labor Standards Act's "Stiffer or Permit" Standard in the Identification of Employees Who Are Misclassified as Independent Contractors, http://www.dol.gov/whd/workers/Misclassification/ AI -2015 _l.htm .................. 9 v STATEMENT OF INTEREST OF AMICUS Amicus writes to highlight the significance to low-wage workers of which service providers can properly be deemed independent contractors and not employees protected by the remedial benefits of the New York Unemployment Insurance Law, Labor Law§ 500 et seq. The Legal Aid Society's low-wage clients are particularly in need of the income supports provided by the unemployment insurance system. Without those supports, loss of a job can lead to eviction and homelessness, hunger, and other severe consequences. Amicus offers both legal and public policy reasons to look very critically at claims that service providers are independent contractors when they are engaged in work that is integral to the business at issue, and to be wary of claims of independence based on appearances created unilaterally by the business seeking to strip such workers of the Act's protections. Low-wage workers, who have very little bargaining power, are particularly at risk of strategic misclassification by employers who create misleading appearances of independence, while actually controlling the work that constitutes the core of their businesses. When workers are performing tasks at the core of a business, it is our experience that, appearances notwithstanding, the business usually does maintain the kind of control that this Court and the Appellate Division have found to be sufficient to suppmt a finding of an employment relationship. 1 Amicus submits this brief pursuant to 22 NYCRR § 500.23. The Legal Aid Society The Legal Aid Society ("the Society") is the oldest and largest not-for- profit public interest law firm in the United States, working on more than 300,000 individual legal matters annually for low-income New Yorkers with civil, criminal, and juvenile rights problems in addition to law refonn representation that benefits all two million low-income children and adults in New York City. The Society delivers a full range of comprehensive legal services to low-income families and individuals in the City. Our Civil Practice has local neighborhood offices in all five boroughs, along with centralized city- wide law reform, employment law, immigration law, health law, and homeless rights practices. The Society's Employment Law Unit represents low-wage workers in employment-related matters such as unemployment insurance hearings, claims for unpaid wages, and claims of discrimination. Our success in obtaining unemployment insurance benefits for our clients serves to keep unemployment from spiraling into multiple deep crises in housing, food, and other basic provisions. Defending their status as employees in the face of employer misclassification is often critical to staving off those disasters. 2 SUMMARY OF ARGUMENT Low-wage workers can be found in a wide array of jobs, not only in hourly manual-labor positions traditionally associated with low-wage work. In particular, there are many positions in the service sector that pay low wages, notwithstanding the skill level or responsibilities of the workers. All of these workers, no matter how skilled they are or the service they provide, face the risk of destitution when their jobs end and they are left without means of suppmt. Unemployment insurance represents a societal commitment to remedy or buffer against the worst effects of losing one's job. It is critical that employers not be permitted to undermine that remedial purpose by structuring their relationships with their employees in ways that give workers the appearance, but not the substance, of independence. In low-wage sectors in which workers have little if any bargaining power, employers have the capacity to shift the costs and risks of flexibility onto workers. For exan1ple, a business can maintain insufficient staff to provide its core services or product, and hire other staff who perfonn almost identical functions but who are deemed "independent contractors" so that they can be laid off without cost or risk to the employer if business slows. The Society has witnessed this pattern in various professions, including teachers and newspaper photographers. In some cases, such as car service drivers, all of the business's 3 core functions are performed by people who cease to enjoy the protections of labor law when the business declares them to be independent while maintaining considerable control over their work in ways that are critical to the running of the business and to its profitability. Given this reality, the Society urges the Court to apply a skeptical eye to claims that workers who form an integral part of a business, performing its core services or producing its core products, are really operating independent businesses. In our experience, it is rare for a business to cede sufficient control to the workers who perform such core tasks to transform them into genuinely independent contractors. Even if such workers have multiple employers in order to make a living wage, it does not mean that they control their work for each employer sufficiently to be independent in any meaningful sense. We also urge the Court not to find independence in factors entirely or largely within the control ofthe business, such as whether it provides benefits or reimburses workers for their on-the-job expenses. While the provision of benefits or reimbursement, for example, can decisively establish an employment relationship, the absence of those fonns of compensation may reflect nothing more than the control of the business and the poor bargaining power of the worker. 4 In this case, Yoga Vida employed the yoga instructors at issue to provide the core service of the business. However, by deeming some of its instructors to be independent contractors, Yoga Vida shifted the risks of its business cycles on its workers, while still maintaining control over key aspects of their work, as the Appellate Division correctly noted. By affirming the Appellate Division, this Comi would head offmisclassification that allows a business to place all of the risks of unemployment on its own workforce or part of it, leaving workers to face precisely the destitution that this remedial labor law is intended to prevent. ARGUMENT I. LOW-WAGE WORKERS OF ALL VARIETIES RELY ON UNEMPLOYMENT INSURANCE TO A VOID DESTITUTION WHEN THEY LOSE THEIR JOBS. A. Low-Wage Workers Can Be Found in a Wide Range of Jobs. From the Society's experience advising and representing hundreds of thousands of low-wage New York City residents every year, we know that low- wage workers can be found in a wide an·ay of industries, not only in manual- labor manufacturing jobs. In pmiicular, there are vast numbers of low-wage workers in the City's service sectors, including semi-skilled and highly-skilled workers. For example, the Society's Employment Law Unit has represented teachers, photographers, sales representatives, clerical staff, and car service 5 drivers, among others, in unemployment insurance matters involving misclassification of workers as independent contractors. Many of these workers were poorly paid when they were employed. All of them faced financial and consequent personal crises when they lost their jobs. Despite the high levels of skill of many of these workers, they were not paid enough to meet the high cost of living in or around New York City while still saving enough money to ride out a period of unemployment. Many lived week to week, paycheck to paycheck, and faced the immediate threat of destitution when they lost their jobs. B. Without Unemployment Insurance, Low-Wage Workers Often Face Immediate and Severe Crises. Whatever their jobs, when low-wage workers lose their jobs and do not have unemployment insurance coverage, they face crises that are severe, and often immediate and mutually reinforcing. Given the high cost of living in New York City, even the better paid of these workers cannot afford to accrue sufficient savings to cany them through times of unemployment. They face eviction, homelessness, hunger, and family break ups. Once they use up their savings and especially if they then lose their homes, it becomes far more difficult to obtain new employment, and to do so, they must often accept even worse terms and conditions of employment. 6 After one or more months of not paying the rent, New Yorkers face the realistic threat of eviction. 1 Once evicted, without employment income, they also face homelessness, whether doubling up with family or friends temporarily, or when those infonnal supports dry up, resorting to the City's homeless shelter system. High levels of unemployment after the 2007-08 financial collapse cmTelated with a sharp increase in homelessness.Z In our experience, once a worker becomes homeless, it is extremely difficult to find a new job. It is also our experience that homeless workers face a greater likelihood of unwanted encounters with law enforcement. These, in turn, create obstacles to finding new employment. For low-wage workers, regardless of their job or skill level, unemployment insurance benefits offer a critical buffer against destitution at times of unemployment. Therefore, it is vital that such workers not lose the protections of those benefits unless they genuinely fall outside the statute's coverage because they really are in business for themselves. 1According to the New York City Department oflnvestigation, in 2014, there were close to 27,000 cases in New York City in which a landlord evicted a residential tenant. See Department of Investigation, Summary of Evictions. Possessions & Ejectments Conducted (Jan. 22. 2015), http://cwtfllc.org/wp-content/uploads/20 15/03/Evictions-by- Marshal-2014-_-DOI.pdf(residential "evictions" plus "possessions"). 2Barbara Sard, Center on Budget Policy and Priorities, Number of Homeless Families Climb;ng Due to Recession (Jan. 8, 2009), http://www.cbpp.org/research/number-of-110meless-families-climbing-due-to-recession. 7 II. MISCLASSIFICATION OF WORKERS UNDERMINES THE REMEDIAL PURPOSES OF THE UNEMPLOYMENT INSURANCE LAW AND PRESENTS A SIGNIFICANT THREAT TO LOW-WAGE WORKERS' ECONOMIC SECURITY A. New York Unemployment Insurance Law is a Remedial Statute Intended to Protect Workers Against the Financial Crises that Would Otherwise Accompany Losing Their Jobs. New York's Unemployment Insurance Law is a "remedial statute designed to protect the wage earner from the hazards of unemployment by providing money benefits to individuals 'unemployed through no fault of their own."' Matter of Ferrara (Catherwood), 10 N.Y.2d 1, 8 (1961) (quoting Labor Law § 501 ). As the Appellate Division has noted, "Unemployment compensation statutes were enacted in various States during a period of distress and were designed to relieve the hardship caused by unemployment due to no fault of the employee." Matter of Machcinski (Ford Motor Co.), 277 A.D. 634, 639 (3d Dep't 1951). The statute itself gives explicit instruction that it is to be interpreted in light of these remedial policies: As a guide to the interpretation and application of this article, the public policy of this state is declared to be as follows: Economic insecurity due to unemployment is a serious menace to the health, welfare, and morale of the people of this state. Involuntary unemployment is theretore a subject of general interest and concern which requires appropriate action by the legislature to prevent its spread and to lighten its burden, which now so often falls with crushing force upon the unemployed worker and his family .... 8 Labor Law§ 501 (emphasis added). Thus, when considering whether to exclude a group of workers from the protections of the unemployment insurance system, the Court should shape its analysis in light of this express statutory intention to prevent or alleviate the kind of economic insecurity that the Society's clients face when they lose their jobs. B. Misclassification is a Frequent Problem Facing Low-Wage Workers. As the Attorney General's brief details, misclassification of employees as independent contractors is attractive to many employers because it serves to evade an array oflabor protections that only apply to employees. These protections, including the unemployment insurance system, cost employers money, so they have an incentive to misclassify their employees as independent contractors. New York and other states, as well as the federal government, have developed targeted and coordinated efforts to combat misclassification, because of the harm to workers, their communities, the economy, and to the public treasury. Brieffor Commissioner of Labor, at 5-l 0; see also United States Dep't of Labor, Wage and Hour Division, Administrator's Interpretation No. 2015-1. July 15. 2015, Subject: The Application of the Fair Labor Standards Act's "Suffer or Permit" Standard in the Identification of Employees Who Are Misclassified as independent Contractors, http://www.dol.gov/whd/workers/Misclassification! AI-20 15 _1.htm (focus of 9 analysis whether worker is economically dependent on employer or in business for herself). The Society's low-wage clients frequently face misclassification in efforts to deny them unemployment insurance and minimum wage and overtime protections. Low-wage workers generally lack sufficient bargaining power to set or negotiate meaningfully over the terms and conditions of their employment. Thus, if an employer insists that such workers sign an independent contractor agreement, they will do so to get the job. In our experience, these agreements are presented as a "take it or leave it" requirement of getting a job, and low~ wage workers can ill afford to tum down work instead of signing the document. Many workers do not even understand the full implications of the agreements they sign. They just sign, as told to, to get the work. However, signing the document does nothing to transform them into the owners or operators of independent businesses. They are just as dependent on the business for their work as they were before signing. In our experience, it is increasingly common for workers misclassified as independent contractors to work side by side with workers who are acknowledged as employees of the business. They perform the same work under very similar conditions, but without some of the remuneration or commitments that their employee counterparts enjoy. 10 This arrangement allows the business to have the flexibility it desires to retain or lay off workers without extra cost, depending on the state of their business. For example, if emollment in a private school is high, the independent contractors work schedules assigned by the business, with whatever remuneration the business offers. But when emollment declines, the business is able to shed the supposed independent contractors without any additional cost, for example, without severance and without being charged for unemployment insurance benefit payments paid to the laid-off workers. This arrangement places the risks and costs of unemployment squarely on the shoulders of the workers, instead of the business. This arrangement is completely contrary to the unemployment insurance law and the policies behind it and gives businesses deploying that arrangement an unfair competitive advantage over businesses that comply with the labor law. In a wage and hour misclassification case, a federal court commented: Duane Reade had the right to "outsource" its requirement for delivery services to an independent contractor ... and seek, by outsourcing, an extra measure of efficiency and economy in providing an important and competitive service. But it did not have the right to use the practice as a way to evade its obligations under the FLSA. Ansoumana v. Gristedes, 255 F. Supp. 2d 184, 193 (S.D.N.Y. 2003). Similarly, businesses have the right to create flexibility in the management of their 11 workforces, but they do not have the right to use flexibility to evade their obligations under the Unemployment Insurance Law. HI. WHEN ANALYZING CONTROL, COURTS SHOULD BE ESPECIALLY SKEPTICAL OF CLAIMS OF INDEPENDENCE WHEN WORKERS ARE PERFORMING FUNCTIONS THAT ARE INTEGRAL TO THE BUSINESS AT ISSUE AND THEY SHOULD LOOK CRITICALLY BEHIND FACTORS THAT REFLECT THE BARGAINING POWER OF THE BUSINESS MORE THAN ANY REAL INDEPENDENCE OF THE WORKERS A. Workers Who Perform Core Functions of a Business Should Rarely Be Found To Be Genuinely Independent of the Business for the Purposes of the Unemployment Insurance Law. As the Appellate Division noted in its decision in this case, the yoga studio admitted that the instructors at issue were "an integral part of Yoga Vida's business." Matter of Yoga Vida NYC, Inc. (Commissioner of Labor), 119 A.D.3d 1314 (3d Dep't 2014). The Commissioner ofLabor is correct in emphasizing the significance of that fact in assessing whether the workers at issue were genuinely independent contractors in business for themselves. Workers performing core functions of a business should rarely be regarded as running independent businesses, absent clear and unequivocal evidence that the putative employer has, in fact, ceded control over those core functions to those workers. In our experience, such evidence is rare. Where the workers form an integral part of the business at issue, businesses by necessity preserve control over that work. It is common, however, for the business to use its superior 12 bargaining power to try to create the appearance of independence but not the reality. Teachers, for example, are clearly integral to the business of running a private school. Without teachers a school cannot function. As a result, a private school must maintain a significant degree of control over its teachers. As with Yoga Vida, when a private school retains teachers to teach courses, it is more than likely that it is controlling their schedules and cmricula, even though it may grant teachers latitude in the classroom, as long as customers are satisfied. As with Yoga Vida, the school almost certainly considers customer feedback when detennining whether to keep a particular teacher. As with Yoga Vida, a private school likely markets itself to consumers as the provider of the classes at issue, registers students itself and takes their payments directly. It then determines how to pay its teachers from those receipts, even though it might offer payment options to its teachers. If the school did not exercise these forms of control, it would lose its ability to manage its programs or to ensure the satisfaction of its customers. If all it did were offer space and facilities and the teachers provided their own courses on their own schedules, the business would not be recognizable as a school and it would lose its ability to market itself to consumers. 13 Similarly, a newspaper cannot operate without the services of photographers. Therefore, it must exercise enough control, such as setting schedules and providing instructions on how it wants photographers to take pictures. See Matter of Nance (NYP Holdings Inc.- Commissioner of Labor), 117 A.D.3d 1294, 1295-96 (3d Dep't 2014). When a newspaper hires a team of photographers to work set schedules to ensure their availability and pays them according to the time they spend working, rather than for their work product, id., the newspaper is ensuring that these core functions will be performed when needed. When a newspaper instructs photographers on how to take pictures for it, id., it is ensuring that the photographers will provide the types of photographs on which the newspaper depends for its business. It is difficult to imagine a newspaper simply shopping around among independent photographers for the photographs it wants and needs in order to put out its product on time. As the Society has seen, it is critical to a car service businesses that it be able promptly to provide drivers to its customers at all times that the business is open. Therefore, they have to ensure that drivers who are operating under their rules and under their name are available on a schedule. They cannot afford to call around to truly independent businesses when each time a customer requests a ride to the airport. 14 Thus, in the Society's experience, where workers are performing work that is integral to a business, it is unlikely that those workers are truly independent. The Court should look skeptically at any claim that such workers are genuinely independent businesses. B. Factors that Reflect Uneven Bargaining Power and Control By a Business Over Workers Should Not Be Seen as Establishing that Workers Are Independent and Not Employees. In cases involving questions of possible misclassification, putative employers tend to point to a variety of ways in which their workers do not look like employees. For example, they observe that the workers signed independent contractor or fi·eelance agreements; that the business does not pay benefits, reimburse certain expenses or provide certain equipment; that the business reported the workers' income on an IRS 1099 independent contractor form; or that the business did not provide initial training. Indeed, Yoga Vida raises some of these same points. However, in analyzing whether there exists sufficient evidence of control over the workers, courts should be leery of factors such as these that, if anything, often demonstrate the uneven bargaining power, and hence control, that the business exercises over the workers. For example, foisting an independent contractor agreement on a worker as a non-negotiable requirement of being retained does not demonstrate that a worker is in business for herself, but rather tends to demonstrate that the 15 business has the power to require the worker to sign as a condition of employment. It is well established that signing such an agreement is not determinative. Matter of Wells (Madison Consulting, Inc.- Commissioner of Labor), 77 A.D.3d 993,995 (3d Dep't 2010); Matter of O'Connor (2020 Powervision, Ltd.- Commissioner of Labor), 67 A.D.3d 1302, 1303 (3d Dep't 2009); Matter of Priester (City & Suburban Deliver:v Sys. -Commissioner of Labor), 273 A.D.2d 654 (3d Dep't 2000). Indeed, signing such an agreement may be evidence of an employment relationship. The disadvantageous content of such agreements, including sometimes provisions in which workers purport to waive their right to unemployment insurance or give up key rights to their work product, can show the degree of control that the putative employer wields over the worker. See, e.g., Matter of Nance, 117 A.D.3d at 1295-96 (employee retained right to copyright but with restrictions on use). Similarly, it is important to recognize that while provision of benefits or reimbursement or equipment or reporting someone as an employee for tax purposes may provide decisive proof of an employment relationship, the reverse is not true, particularly where workers lack the bargaining power to obtain more than low wages. See, e.g., Matter of Rivera (State Line Delivery Service, Inc. - Roberts), 69 N.Y.2d 679, 682 (1986), cert. denied, 481 U.S. 1049 (1987) (affirming Matter of Ross (Majestic Messenger Service- Roberts), 119 A.D.2d 16 857 (3d Dep 't 1986)) (lack of expense reimbursement not dispositive); Matter of Ramirez (Pro point Graphics LLC- Commissioner of Labor), 127 A.D.3d 1295, 1296 (3d Dep't 2015) (lack of tax withholding and benefits not dispositive); Matter of Columbia Artists Mgmt. LLC (Commissioner of Labor), 109 A.D.3d 1055, 1056-57 (3d Dep't 2013) (independent contractor provision, lack of fringe benefits, and freedom to work for others not dispositive); Matter of Kelly (Frank Gallo, Inc.- Commissioner ofLabm), 28 A.D.3d 1044 (3d Dep't 2006), leave to appeal dismissed, 7 N.Y.3d 844 (2006) (driver who provided his own vehicle found to be an employee); Matter ofStuckelman (Blodnick, Gordon, Fletcher & Sibell, P.C.- Commissioner of Labor), 16 A.D.3d 882, 883 (3d Dep't 2005) (filing taxes as self-employed not dispositive); Matter of Langford (Transportation Planning Co. -Commissioner of Labor), 282 A.D.2d 804, 805 (3d Dep't 2001) (lack of tax withholding not dispositive). Absence of those factors does not necessarily support a finding of an independent contractor relationship. In the case of low-wage workers in particular, the business's refusal to pay benefits or reimbursement or to provide certain required equipment likely shows the outsized bargaining power that the business holds over the worker and therefore supports a finding of control. Indeed, failure to pay reimbursement for expenses or to provide or pay for equipment may simply constitute a violation of Labor Law§ 193. 17 Whether a worker performs work for multiple entities, including competitors, is similarly non-determinative. Prohibiting work for competitors is strong evidence of the control that an employer exercises over an employee. But allowing workers to work for other employers does not establish and independent contractor relationship. Many employees, particularly low-wage workers and/or workers in industries in which full-time work is not guaranteed or provided, have to hold multiple jobs to make ends meet. It should not matter whether they are working at multiple yoga studios or schools, multiple newspapers, multiple car services, or multiple retail stores. Holding various jobs is often a marker of economic need and insecurity and not evidence of being an independent entrepreneur. With skilled workers, this Court has applied an "overall control" test in determining whether an employment relationship exists. As this Court explained in Matter of Empire State Towing & Recovery Assn., Inc. (Commissioner of Labor), 15 N.Y.3d 433,437,438 (2010): In some cases, this Court has applied the "overall control" test where "substantial evidence of control over important aspects of the services performed other than results or means" is sufficient to establish an employer-employee relationship [citation omitted]. This test is applicable to services where the details of the work performed are difficult to control because of considerations such as professional and ethical responsibilities [citations omitted]. This analysis has been typically applied in the context of professionals such as physicians and attorneys [citations omitted]. 18 See, e.g., Matter of Encore Music Lessons LLC (Commissioner of Labor), 128 A.D.3d 1313, 1314 (3d Dep't 2015) (music teachers). The overall control test makes sense because the degree of supervision expected with skilled workers is less than that with unskilled workers. A newspaper photographer, for example, will not likely be tailed by her editor when she is out in the field. Nor will a teacher or instructor nonnally be placed under constant supervision unless there is negative feedback on her perfonnance. The key questions with respect to skilled or professional work should be how much overall control the business exercises, not whether the worker exercises independent judgment in the perfom1ance of her job. C. The Appellate Division Was Correct in Affirming the Decision of the Unemployment Insurance Appeal Board in this Case. The factors cited by the Appellate Division in this case all support a finding of substantial evidence of an employment relationship. As noted above, the Comi was correct in relying on the business's admission that the yoga instructors "were an integral part ofYoga Vida's business," 119 A.D.3d at 1314. Clearly, the studios could not operate without yoga instructors. The workers at issue, together with instructors who were indisputably staff employees, were providing the principal service of the studios. They were supervised by the studios. The head of the studios personally ensured that the instructors were certified and had adequate training and personally addressed 19 instructors on their manner of instruction if it posed a risk of injury or if he otherwise found their conduct objectionable. !d. The studios considered feedback on the instructors in determining whether to renew their contracts. (A. 83-85, 107) The studios controlled the administration of the classes. They solicited the students, published the class schedules, and set the duration of each class. !d. The studio also provided the facilities and equipment. (A. 37 (~~ 4, 5), 88) As the Commissioner of Labor argues, the factors emphasized by Yoga Vida do not undermine the decisions of the Appellate Division or the Unemployment Insurance Appeal Board. Brief for Commissioner of Labor, at 52-62. As discussed above, that instructors can teach at other studios is merely consistent with part-time employment, a common feature oflow-wage employment. As the Commissioner observes, Brief at 55-56, multiple part-time jobs are a common feature of the low-wage employment market. Although a prohibition on teaching elsewhere would constitute strong evidence of an employment relationship, the absence of a prohibition does not require a finding that the worker is an independent contractor. As is also discussed above, the fact that the studio did not pay fringe benefits simply reflects the relative bargaining positions of the studios and the instructors. That the studios did not pay taxes may just mean that they violated 20 tax law. Similarly, that the studio failed to pay for instructors' equipment, travel expenses, or insurance may mean that it violated Labor Law § 193. It would be perverse to reward a business for violating one set of laws by using that violation to justifY permitting it to evade its responsibilities under another related law. Finally, the use of flat rates for time worked or a combination of a time- based rate with a commission are both consistent with common employment practices. Neither, nor the existence of an option, would demonstrate that a worker is in business for herself. In sum, the Appellate Division's decision co!Tectly placed these instructors at the center of the studios' business. As an integral part of that business, the studios' claim that these instructors, unlike its staff instructors, are really in business on their own, should be viewed with great skepticism. Given the record of control exercised by the studio with respect to these core activities, the Appellate Division decision should be affirmed. These workers are entitled to the remedial benefits of the Unemployment Insurance Law if the studios let them go for no fault of their own. The studios should meet their obligation to pay into the unemployment insurance system so that the burdens of unemployment are not shifted onto the workers who make their business possible. 21 CONCLUSION This Court should affirm the Appellate Division's decision and find that the yoga instructors who at the core of Yoga Vida's yoga instruction business are not genuinely independent contractors, but rather are employees of the studio for which they work, entitled to the remedial protections against destitution of New York's Unemployment Insurance Law when they lose their jobs due to no fault of their own. Dated: New York, NY November 25, 2015 Respectfully submitted,,. }t. By: ,7::Z;.-r--/'-"'d ~,_..,._ ll1S:Ot. Richard Blum I The Legal Aid Society SEYMOUR JAMES ADRlENE HOLDER KAREN CACACE RICHARD BLUM Employment Law Unit 199 Water Street, 3'd Floor New York, NY 10038 Attorneys for Amicus 22