Bloomberg reported that the state has asked Uber to fork over hundreds of millions in unemployment taxes for its drivers, who the state considers employees.
Racecourse on November 09, 2019 in Melbourne, Australia.New Jersey has asked Uber to fork over hundreds of millions in unemployment taxes for its drivers, who the state says it considers employees.reported Thursday, New Jersey’s Department of Labor and Workforce Development sent letters to Uber and subsidiary Rasier LLC assessing a total of $523 million in back taxes on ride-hail drivers, following at least four years of inquiries by the state.
“The state’s determination is limited to unemployment and disability insurance, but it could also mean that Uber is required to pay drivers minimum wages and overtime under state law,” Bloomberg wrote. “Uber’s costs per driver, and those of Lyft, could jump by more than 20% if they are forced to reclassify workers as employees, according to Bloomberg Intelligence.”
The company also noted that the process will probably take years, and suggested that, in any case, the estimated $650 million in back taxes and interest may be significantly too high, based on its actual operations in the state.The news comes as Uber and Lyft’s stock prices continue to slide, and while the companies keep fighting for an exemption from California’s recently passed labor classification law known as AB5.
The New York Do It Right Employment Classification Test Coalition, which has been advocating for similar legislation to be passed in New York, commented by email that New Jersey’s Department of Labor “did the right thing for Uber drivers.”
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