Uber pays New Jersey $100 million after misclassifying drivers

Uber paid New Jersey $100 million after an audit found the popular auto service misclassified hundreds of thousands of drivers in New Jersey, the Department of Labor and Workforce Development said. work of the state.

Instead of declaring the drivers employed, the company considered them independent contractors and therefore did not offer them benefits such as unemployment insurance, temporary disability and family leave, the Labor Department said. Uber also failed to make required contributions for unemployment, temporary disability and workforce development, according to the agency.

This payment is the largest ever received by the state and covers nearly 300,000 drivers.

“We will not pander to the whims of the latest corporate business models that are based on the erosion of long-standing protections,” Labor Commissioner Robert Asaro-Angelo said in a statement. “Our policies protect and empower workers while strengthening businesses, and the Murphy administration has given us the tools to protect our workforce and hold all employers accountable.”

Uber and a subsidiary known as Rasier LLC were ordered to pay $78 million in outstanding contributions plus penalties and interest of $22 million.

Federal standards require all states to audit 1% of businesses to ensure they meet UI premium requirements. New Jersey also allows the Labor Department to audit companies if a complaint is filed or if workers attempt to claim unemployment or disability benefits and there is no record that the employer contributed.

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In the case of Uber, the department looked at a five-year period, from 2014 to 2018, and initially assessed the companies at $523 million in overdue contributions plus penalties and interest of up to $119 million. said the Labor Department. However, these had been estimated based on incomplete data because Uber had not cooperated, according to the agency.

The companies disputed the findings and the New Jersey Office of Administrative Law revised the valuation to $100 million based on additional information from Uber and Rasier that was more complete and accurate than the initial data provided. .

Contributions, penalties, and interest received go to funds used to pay workers’ benefits and to cover related expenses of administering and protecting the trust fund for all workers and employers in New Jersey.

“We will not tolerate companies that misclassify their workers, thereby denying employees vital benefits and evading their obligation to contribute to programs that benefit the workforce,” said Acting Attorney General Matthew Platkin. . “By misclassifying workers, companies harm their employees and circumvent their obligations under the law. New Jersey will continue to aggressively enforce our employee misclassification laws to prevent such conduct.

Uber did not immediately respond to a message seeking comment Tuesday afternoon.

Workers can find more information about misclassifications and their rights and protections at myworkrights.nj.gov.

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