Are New Jersey Uber Drivers Covered By Workers’ Compensation Insurance?
You might ask yourself the above question if you are considering signing up to drive for the transportation service Uber. Uber promises that anyone with a valid driver’s license, personal car insurance, a clean record, and a four-door car can meet the New Jersey requirements to drive for Uber.
The Uber driver makes his or her own hours and is free to pick up or drop off a rider anywhere they chose and the driver can work as much or as little as they choose. Uber requires its drivers to carry the appropriate automobile insurance to cover the driver’s liability to other parties, damage to the vehicle and injury to the driver.
Uber provides commercial auto liability insurance for drivers to protect against injury to others. Uber drivers are paid a percentage of the fares they generate and receive a 1099 form yearly from Uber so that they can declare their earnings and pay their own taxes on the money they earn.
Since Uber does not consider its drivers employees, or provide workers’ compensation coverage in the event an Uber driver is injured, it is important to know what you are giving up by being an Independent Contractor/Uber driver.
Workers’ compensation coverage in New Jersey includes weekly wage replacement paid at 70% of wages, medical care paid 100% by the workers’ compensation carrier, and partial or total permanency benefits paid for a period of time if the injured worker is left with an impairment after all of the medical treatment is provided.
The courts in New Jersey have not decided any workers’ compensation cases for Uber drivers, however, they have decided cases for other employees who drive for other car services. Although the facts of each individual case vary, the case explained below gives an idea of the factors the court considers when deciding if a driver is an independent contractor or an employee.
The courts have outlined a 12-part test to determine if a person is an employee or an independent contractor, for the purpose of whether or not New Jersey workers’ compensation coverage applies. These factors include the employer’s right to control the manner of the work, the extent of supervision needed, who furnishes the equipment, how the person is paid, whether there is paid vacation and sick time, and whether the “employer” pays Social Security taxes, and the intention of the parties.
In a recent court case in New Jersey, the Appellate Division found that a limousine driver for the XYZ Two Way Radio Company was an independent contractor and not an employee when the driver was injured in a serious motor vehicle accident. The court analyzed the above factors and found that XYZ Two Way Radio Company exercised little control over the driver since he could work as many or as few hours as he wanted.
The Court noted that the driver supplied his own equipment, including his own vehicle and auto insurance, and that the company only provided a small car computer that was used to communicate with the office. The driver was paid a percentage of the fares he generated, and was free to reject any pick-up sent to him by the company. The driver was sent a 1099 form every year and no Social Security or wage taxes were paid by the company.
Based on all of these circumstances the Court found that the driver for XYZ Two Way Radio was an independent contractor, and not an employee entitled to workers’ compensation coverage. This was despite the fact that that the driver worked for the company for 23 years, was told what type of car he must drive and what to wear, and worked a fairly regular schedule.
Comparing the above case to the factors relevant to the Uber driver, courts in New Jersey may consider Uber drivers independent contractors and not employees subject to workers’ compensation coverage. Uber is still taking the position that its drivers are Independent contractors, not subject to workers’ compensation in New Jersey.
However, this has not yet been the subject of an Appellate Court decision. If you work for Uber and get injured in an accident while working, your own automobile coverage would provide some medical care, and possibly some weekly wage replacement benefits, but probably not to the level of coverage provided under the workers’ compensation laws in New Jersey.
Your own automobile policy would not provide the permanency benefits provided under the workers’ compensation statute in this state. Probably not a deal breaker for many given the flexibility offered by Uber, but at least Uber drivers should be aware of the workers’ compensation benefits they may be giving up.