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Dispute between state, ride-hailing companies delays unemployment payments for drivers

Updated: Jun. 23, 2020 at 8:34 PM HST
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HONOLULU, Hawaii (HawaiiNewsNow) - Navigating the maze of unemployment has been frustrating but for ride-hailing drivers it’s been especially confusing as Uber and Lyft battle with the state over their status.

About 1,400 Uber and Lyft drivers are in the unemployment system due to the pandemic.

Many were initially denied unemployment insurance and applied to the federal Pandemic Assistance Program, a new program established by Congress to provide unemployment benefits to gig workers and independent contractors.

One driver who did not want his name used said he was paid through PUA between March and May, then the checks suddenly stopped. He was told his claim was being sent back to the state Unemployment Insurance program.

“It’s just absolutely disheartening,” he said.

At the center of the problem is the ongoing debate over whether ride-hailing drivers for Uber and Lyft are independent contractors or employees.

“Uber and Lyft do not consider these individuals to be under covered employment,” said Anne Perreira-Eustaquio, the acting director of the state Labor Department.

She said, however, that DLIR disagrees and considers the drivers covered by Unemployment Insurance law.

But the ride-hailing companies do not pay into the trust fund, meaning other businesses are fronting the money.

The state is now trying to go after the companies for all the back costs, which could amount to millions of dollars. The issue is in the appeals process.

Uber and Lyft are trying to get the law changed to clearly say drivers are independent contractors and not entitled to unemployment coverage at all. A bill has to do that has passed the House and has a first hearing Wednesday in the Senate.

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