Uber pays $100 mln to New Jersey in driver status dispute

NEW YORK

Uber paid the U.S. state of New Jersey $100 million in back taxes and fines for labeling nearly 300,000 of its drivers as self-employed and withholding required benefits, officials said on Sept. 13.

The ride-sharing giant, however, insisted that its drivers were indeed independent contractors and said it only paid a fraction of the $1 billion initially demanded by the northeastern state.

The payment stems from a government audit of Uber’s operations in New Jersey between 2014 and 2018, which concluded that the company had improperly classified its drivers as independent workers.

Because of that, the New Jersey Department of Labor said in a statement, Uber drivers lost the rights to a minimum wage, overtime pay, unemployment insurance, earned sick leave, family leave and other benefits.

“We will not tolerate companies that misclassify their workers, thereby denying employees vital benefits and dodging their obligation to contribute to programs that benefit the workforce,” said the state’s acting attorney general, Matt Platkin.

New Jersey Labor Commissioner Robert Asaro-Angelo said job flexibility shouldn’t come at the expense of social benefits.

“Let’s be clear: There is no reason temporary, or on-demand workers who work flexible hours or even minutes at a time can’t be treated like other employees in New Jersey or any other state,” he said in a statement.

Whether to classify drivers for ride-sharing companies as employees or independent contractors has long been a matter of debate among business and government representatives, with no clear consensus emerging thus far.