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american lawyer media news service In a groundbreaking decision on telecommuting, the New York Court of Appeals said on July 2 that physical-not virtual-presence governs eligibility for unemployment insurance benefits. The court’s 6-0 decision in Allen v. Commissioner of Labor, 2003 NYSlipOp. 15696, apparently marks the first time that any state or federal court has applied to telecommuting the uniform definition of “employment” as it relates to unemployment benefits. It said that definition, adopted by most states, is premised on the goal of providing benefits in the locale where the unemployed individual resides and is most likely to seek another job. “While the drafters of the uniform rule could not have envisioned a world of interstate telecommuting, these underlying purposes remain valid, and are best served by tying localization to the state in which an interstate telecommuter is physically present,” Judge Susan Phillips Read wrote for the court. The telecommuter case involved Maxine Allen, a computer specialist with Reuters America Inc. who worked out of the firm’s Long Island, N.Y., headquarters until her husband changed jobs and they moved to Florida. When Allen moved, Reuters provided her with a laptop computer and other equipment necessary to connect to the company’s mainframe in New York. She was required to maintain regular hours, report sick days, obtain permission to start her day late or end it early, and was in daily contact with her supervisors. Reuters ended the telecommuting arrangement in 1999. Allen declined the company’s offer to return to the New York office, then applied for unemployment benefits. Initially, she sought Florida benefits. However, after learning that New York would pay her considerably more ($365 weekly compared with $275 weekly), Allen applied for New York benefits. The state Department of Labor said she was not eligible; an administrative law judge said she was; and the Unemployment Insurance Appeal Board-in a determination upheld by New York’s intermediate-level court, the Appellate Division-found that Allen was not eligible because all of her work was performed in Florida. Last week, New York’s highest court resolved the matter with what is apparently a first-in-the-nation decision. The ruling hinged on the definition of employment in § 511 of the Labor Law. That definition, which refers to work localized in a particular state and a person’s “base of operation,” is derived from the uniform standard embraced by most states. Here, Allen claimed that physical presence in New York was not required for purposes of unemployment benefits because her services were actually localized at Reuters’ mainframe in New York. But the court rejected that reasoning. “In our view, physical presence is the most practicable indicium of localization for the interstate commuter who inhabits today’s ‘virtual’ workplace linked by Internet connections and data exchanges,” Read wrote. She said that “no other state or federal court seems yet to have interpreted the uniform rule as applied to interstate telecommuters.” Allen appeared pro se. Assistant Attorney General Dawn A. Foshee argued for the commissioner.

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