Article contributed by Ilan Weiser and Nicole M. Vescova, Ellenoff Grossman & Schole LLP
The food delivery business has served as a lifeline for many restaurants throughout the pandemic as government mandated closures restricted on-premises dining. If it was not clear before, it is clear now that delivery workers play an increasingly important role in a restaurant’s operations and overall profitability. In fact, many restaurants have expanded their food delivery services and offerings as more third parties are available to consumers to meet the demand for food delivery.
NEW YORK CITY’S NEW LEGISLATION
In response to reports of poor working conditions and pay, earlier this year, New York City passed legislation to strengthen legal protection for delivery app workers. The new legislation will provide delivery app workers with new rights and empowering them, as well as the NYC Department of Consumer and Worker Protection, to enforce violations by food delivery service providers, which include popular third-party apps many consumers use several times on a daily basis, e.g., UberEats, Seamless, GoPuff.
It is important to note that this legislation only applies to “food delivery workers,” meaning those who are engaged as independent contractors by a third-party food delivery service or a third-party courier service (“Delivery Apps/Services”) to deliver food, beverage or other goods from a business to a consumer in exchange for compensation (“Delivery App Workers”). A “third-party-food delivery service” means any website, mobile application, or other internet service that arranges for the sale and same-day delivery or pickup of food and beverages prepared by a food service establishment. A “third-party courier service” is a service that facilitates the same-day delivery or pickup of food, beverages or other goods from a food service establishment on behalf of a third-party food delivery service. This legislation does not apply to delivery workers directly employed by a restaurant or a Delivery App.
Below we summarize the most significant aspects of this new legislation.
TOILET ACCESS FOR DELIVERY APP WORKERS
Food service establishments are now required to permit Delivery App Workers to use their restrooms when the Delivery App Worker is lawfully on the premises for the purpose of picking up a customer’s order, unless doing so would require the Delivery App Worker to walk through the food service establishment’s kitchen, food preparation, storage area or utensil washing area, or if restroom access would create health or safety risks.
INSULATED DELIVERY BAGS
Effective April 22, 2022, Delivery Apps/Services must either provide Delivery App Workers with insulated food delivery bags, or otherwise make them available to Delivery App Workers free of cost.
DELIVERY DISTANCE AND PAYMENT TRANSPARENCY
Beginning April 22, 2022, Delivery App Workers will be able to set a maximum travel distance per delivery trip from a location they choose, and refuse any trip that exceeds that distance. Also, they will be able to select certain bridges or tunnels they would prefer not to take and refuse any trip that would require crossing that bridge or tunnel.
Moreover, Delivery Apps/Services will be required to disclose the proposed trip’s pickup location, estimated time and distance to the drop-off point, any customer gratuity, and how much money that the Delivery App/Service will pay the Delivery App Worker (not including any customer tip).
MINIMUM TRIP PAYMENTS
The legislation requires the Department of Consumer and Worker Protection to study Delivery App Worker conditions and to propose a minimum “per trip” payment for Delivery App Workers by January 1, 2023. The minimum “per trip” payment may not include gratuities and will be reviewed on an annual basis.
ENFORCEMENT AND REMEDIES
The Department of Consumer and Worker Protection will have the ability to enforce this legislation against Delivery Apps/Services on its own initiative or through Delivery App Workers’ complaints.
Food establishments, including restaurants, who fail to provide restroom access are subject to a $50 fine for the first violation and $100 penalty for each offense thereafter. Violations of other aspects of the legislation could result in Delivery Apps/Services being subject to civil penalties ranging from $200 to $2,500.
CONCLUSION
While this legislation does not impose significant obligations on restaurants, this legislation has the potential to significantly impact a restaurant’s use of Delivery Apps/Services. With increased wages for Delivery App Workers, Delivery Apps/Services may try to push the costs on restaurants. However, with higher wages and more legal protections, the pool of Delivery App Workers may grow, allowing restaurants to do more business. As such, restaurants should be ready for potential changes to their contracts with Delivery Apps/Services, and are encouraged to consult with legal counsel to ensure they are compliant with this new legislation.
Ilan Weiser is a Partner in the Labor & Employment practice group at Ellenoff Grossman & Schole LLP in New York City. Mr. Weiser exclusively represents businesses of all sizes and sectors on how best to comply with the federal, state and local labor laws that govern their operations. Mr. Weiser’s principal area of expertise is employment law litigation and has vigorously defended hundreds of his clients in federal and state court and before various governmental agencies against claims of employment discrimination and unfair pay practices. Mr. Weiser has particularly in-depth knowledge of wage and hour law and regularly defends and counsels his clients in class and collective lawsuits concerning claims for unpaid wages.
Nicole M. Vescova is an Associate in the Labor & Employment practice group at Ellenoff Grossman & Schole LLP in New York City. Ms. Vescova represents and advises businesses across all industries in a variety of labor and employment matters, including proper pay practice, employee classification, termination, and leave. Ms. Vescova drafts employment policies and agreements such as employee handbooks, separation agreements and restrictive covenant agreements. She also defends employers against claims brought by employees in federal and state court, and before administrative agencies, such as the EEOC and NLRB.
Ilan Weiser (iweiser@egsllp.com) and Nicole Vescova (nvescova@egsllp.com) can be reached via phone at 212-370-1300.
