Uber paid a $100 million back tax and fine to the US state of New Jersey for labeling its nearly 300,000 drivers as self-employed and withholding essential benefits, officials said Tuesday.
However, the ride-sharing giant insisted that its drivers were in fact independent contractors and said it only paid a fraction of the $1 billion initially sought by the northeastern state.
The payout 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 their rights to minimum wage, overtime pay, unemployment insurance, earned sick leave, family leave and other benefits.
State Acting Attorney General Matt Platkin said, “We will not tolerate companies that misclassify their employees, thereby denying employees significant benefits and for contributing to programs that benefit the workforce. The liability is dodged.”
New Jersey Labor Commissioner Robert Asaro-Angelo said job flexibility should not come at the cost of social benefits.
He said in a statement, “Let’s be clear: there is no temporary reason, or on-demand, employees who work flexible hours or even minutes at a time to not be treated like other employees in New Jersey or any other state.” can be done.”
Classifying drivers as employees or independent contractors for ride-sharing companies has long been a matter of debate among business and government representatives, with no clear consensus until now.
Uber defended its stance on Tuesday.
“Drivers in New Jersey and nationally are independent contractors who work whenever and wherever they want – this kind of work is rampant because they value flexibility,” the company said in a statement to AFP. “We look forward to working with policymakers to deliver benefits while preserving the drivers of resilience.”
It was unclear whether New Jersey officials still considered Uber in violation of its activities in the years following the audit.
The New Jersey Department of Labor did not immediately respond to AFP’s request for comment.
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