I have been involved in workers’ compensation law since graduating from law school in 1997. My experience in this field enabled me to see firsthand how the provision of lost wages and medical benefits in a timely fashion can mean the difference between full recovery from injuries sustained while working and financial ruin with severe injuries that last a lifetime.
When I started working in the for-hire vehicle industry in 2003, I saw that there was a major problem between livery bases, livery drivers, and the worker’s compensation system in general. They all seemed to be at odds with one another. This is understandable because traditionally workers’ compensation insurance is only provided to employees and not to independent contractors.
Back then, there was no such thing as the “gig economy”. While most livery drivers understood that they were not entitled to workers compensation benefits because they were independent contractors, most – if not all – had no choice but to file a claim because when you were out of work and are injured, there is – or should always be – some entity there to provide some kind of help. This is what is referred to as the social safety net.
Throughout the 20th century, our entire country has been reliant upon a safety-net that society has set up for those who are in need of benefits. The safety net available across the country includes Social Security, Medicaid, unemployment, and other benefits that are available to workers for one reason or another.
Back in 2003, I saw the ongoing saga of livery base owners claiming that drivers were independent contractors and thus not entitled to workers’ compensation benefits. Whether drivers actually believed that they were employees or not, the fact remained that they filed claims against livery base owners and the cases took sometimes up to five years to resolve. During this period of time, when their cases were being adjudicated, livery drivers went without any form of compensation and often received limited medical care. By the time their cases were resolved, there was no rhyme or reason as to why one driver was found to be an employee while another driver was found to be an independent contractor. This provided a lack of clarity in the law and a lack of predictability for both livery base owner and livery driver. Livery drivers were left without knowing what their rights were and if they were entitled to any benefits. On the other hand, livery base owners were left without knowing what their legal responsibilities were. A lack of clarity in the law is never beneficial for anyone.
Back in 2007, I was asked to work with the governor’s counsel on the creation of the New York Independent Livery Driver Benefit Fund (Livery Fund). At the time, I had no idea where that venture was going to take me and the livery industry in general. The legislation that created the Livery Fund was passed in 2008 and the Livery Fund went into effect on January 1, 2010. It has now been slightly over 11 years since the Livery Fund was created.
As the general counsel and executive director of the Livery Fund, I have been intimately involved with its operations since its inception. I can honestly say that the Livery Fund does in fact work. In conjunction with changes in the no-fault law, when a livery driver is injured while working, they receive benefits either from the Livery Fund or their no-fault insurance carrier. Livery base owners now know what their responsibilities are from a financial perspective and livery drivers now know what rights they have and what benefits they are entitled to when they are injured while working.
Most importantly, not only does the Livery Fund work properly and as intended, but I am also proud to say that it has also been managed in a fiscally responsible manner. The law requires the Livery Fund to maintain a reserve fund. This is a fund of monies that the Livery Fund must maintain by law in order to ensure that if additional funds are needed in order to operate properly, it has them on hand to enable it to continue to operate without additional assessment of the members.
The numbers speak for themselves. When the Livery Fund was initially created, the cost to each livery base was $260 per affiliated vehicle per year. Due to the effective management of the Livery Fund, along with the strong relationship that the Livery Fund has with Hereford Insurance Co. (the Fund’s insurance carrier), we have been able to consistently reduce the fees per vehicle. The cost per vehicle now is under $200 per year. Additionally, at no time was any member ever assessed additional monies. This is a true testament to the fact that the Livery Fund operates as it was intended. I have personally seen the number of drivers who are grateful to the Livery Fund for being there to provide benefits in their time of need.
When COVID-19 hit New York City, the livery industry was devastated. Most bases suffered up to a 90% decline in business. This obviously translates to a significant decline in the income of bases and drivers. Even now, almost no livery bases have fully recovered. While the Livery Fund did not have any responsibility to provide relief to bases or benefits to drivers due to COVID, the board of directors did not want to see any livery base become out of compliance with the law and did not want to see any livery driver go without any benefits that they may be entitled to. As a result, over the past year, the board of directors of the Livery Fund has decided to utilize the funds that it had held in reserve to pay the membership dues of each member base. This has resulted in at least a modicum of financial relief to livery bases who could not afford to make their membership payments and has provided at least some form of mental relief to drivers knowing that they would not be without benefits in the event that they were injured while working.
None of this would have been possible had it not been for the dedication of the board of directors of the Livery Fund and the strong relationship that the Fund has with Hereford Insurance Co., which is a leader in the for-hire vehicle industry. I am proud to be part of this organization and I am proud of all of its accomplishments.
In recent years, there has been a massive growth of the gig economy around the country. There still remains the outstanding issue of what benefits gig workers should be entitled to. Not full employee benefits, but not no benefits either.
This is an issue that is being actively debated in each state around the country. I hope that if one good thing comes from the COVID pandemic it is the undeniable reality that gig workers should have access to some sort of social safety net. What that safety net will encompass and how it will be funded is an issue that I have been working on for the past few years.
I believe the Livery Fund can serve as a template for other states and entities to utilize, to enable those in the gig economy to receive additional benefits. I have offered my time and experience to a number of organizations that are seeking to create a fund for the provision of gig benefits to gig workers. I am hopeful that as the gig economy grows around the country, people will realize the need for gig workers to have additional benefits. As always, I am willing to donate my time, energy and experience in this area in order to bring about change not only for the benefit of For Hire vehicle industry in New York City but for the vitality of the gig economy in general.