Uber fined $650 million by New Jersey over driver classification
The ride-hailing company is challenging the fine and says "drivers are independent contractors in New Jersey and elsewhere."
New Jersey is the latest state to say Uber's drivers should be classified as employees rather than independent contractors. The state's Department of Labor and Workforce Development said that because of this misclassification, the ride-hailing company owes it roughly $650 million in unemployment taxes and disability insurance, according to Bloomberg Law.The Department of Labor reportedly has been trying to get unpaid employment taxes from Uber going back as far as 2015, according to documents obtained by Bloomberg Law. It said the company owed the state $523 million in overdue taxes along with another $119 million in interest and penalties for the last four years. Uber disputes these findings.
"We are challenging this preliminary but incorrect determination," an Uber spokesman said in an email. "Because drivers are independent contractors in New Jersey and elsewhere."
Driver classification is an issue that government regulators have been taking a closer look at over the past year. California passed a law in September that could require Uber and other on-demand companies to reclassify their drivers as employees instead of independent contractors. The law is set to go into effect Jan. 1. New York, Oregon and Washington state have considered similar legislation.
Uber, Lyft and several other tech companies have vowed to fight the California law, collectively putting more than $90 million behind a ballot initiative that'll take the issue to voters next November. Many drivers have said this move is a slap in the face as they struggle to earn a living wage........MORE
Our comment on the fight against the California law, October 30:
Can This Be Right? Uber, Lyft To Spend $90 Million Fighting Califonia Gig Worker Law
It's almost as if raising driver pay threatens the very existence of the companies....
