Determining a claimant's exclusion with respect to his or her eligibility for unemployment insurance benefits pursuant to Labor Law §565(2)(d)

Determining a claimant's exclusion with respect to his or her eligibility for unemployment insurance benefits pursuant to Labor Law §565(2)(d) 
Matter of Clemons (Village of Freeport--Commissioner of Labor), 2017 NY Slip Op 04333, Appellate Division, Third Department

Labor Law §565[2], in pertinent part, provides for certain exclusions from eligibility for unemployment insurance benefits. In addition to services not included pursuant to the provisions of §511 the Labor Law, the term "employment" does not include services rendered for a governmental entity by a person serving on a temporary basis in case of fire, storm, snow, earthquake, flood or similar emergency.

The Village of Freeport, Nassau County, [Village] sustained extensive damage as a result of Hurricane Sandy and was declared a major disaster by federal, state and local governments and ultimately received federal funding to assist it with its clean-up and restoration efforts. Village hired two individuals [Claimants] as temporary laborers to help with these clean-up and restoration efforts.

Following the end of their employment by the Village, Claimants filed applications for unemployment insurance benefits, and, over Freeport's objection, the Department of Labor issued initial determinations finding that the wages paid to Claimants were not excluded under Labor Law §565(2)(d) and thus Claimants were entitled to receive unemployment insurance benefits. Ultimately the Unemployment Insurance Appeal Board sustained the Department's determinations and Freeport appealed.

Freeport challenged the Unemployment Insurance Appeal Board ruling that the two Claimants were eligible to receive unemployment insurance benefits because they were not employees of Freeport within the meaning of Labor Law §565(2)(d). Freeport, on the other hand, argued that Claimants fell within the ambit of this statutory exclusion and thus were ineligible for unemployment insurance benefits.

The Appellate Division affirmed the Board's determination, explaining that for the  purposes of determining a claimant's exclusion with respect to his or her eligibility for unemployment insurance benefits pursuant to Labor Law §565(2)(d), "Whether this exclusion applies presents a mixed question of law and fact, and the Board's determination in this regard will be upheld if it has a rational basis"

It was not disputed that Claimants were hired on a temporary basis because of the damage caused by the hurricane. The court said that "the controverted issue is whether the cited exclusion applies and, more specifically, whether the services provided by . [an] emergency."

Claimants had been hired on a temporary basis using federal grant money received as a result of the damage caused by the hurricane. However, they both, performed routine maintenance duties, including cutting grass, raking leaves, shoveling snow, driving trucks and cleaning municipal parking lots. In determining that the services performed by Claimants were related to the hurricane clean-up efforts but "not performed in case of an emergency," the Board also noted that the Claimants were hired almost a year after the hurricane and at a time when "there was no need for immediate action."

The Board, said the Appellate Division, also relied upon a Program Letter issued by the United States Department of Labor [DOL] that provided the DOL's interpretation of the exclusion from unemployment insurance coverage of governmental services performed in case of emergency. Letter No. 22-97 stated that "the urgent distress caused by the emergency . . . must directly cause the need for the services to be performed" and that, if the services performed occur "after the need for immediate action has passed, they are not necessarily performed in case of emergency.

As Claimants were employed by Freeport  nearly a year after the hurricane, the court found that there was a rational basis for the Board's decision that the exclusion did not apply and that the services performed by Claimants "were in covered employment" and thus they were eligible for unemployment insurance benefits.

Accordingly, the Appellate Division said that it found "no reason to disturb the decisions of the Board" regarding Claimants.

The decision is posted on the Internet at: 
http://www.nycourts.gov/reporter/3dseries/2017/2017_04333.htm