Uber might claim that its drivers are not employees rather contractors, but New Jersey is not buying that deal. The labor department of the state has slapped Uber and its Rasier division with an almost $650 Million bill for overdue disability and unemployment insurance taxes from the last 4 Years, disputing that the ridesharing company misclassified drivers. Almost $523 Million of that is real taxes, while almost $119 Million is late in penalties and interest. Robert Asaro-Angelo (the Labor Commissioner) claimed that this was an instance of the management “cracking down on worker misclassification” and that there were “no reasons” on-demand employees cannot be treated similar to other flexible employees.
New Jersey offered Uber a $54 Million bill earlier in 2015, but it is not sure if the firm ever paid that.
Not shockingly, Uber is contesting the bill. It claimed to the media that it was “challenging this preliminary but mistaken determination,” claiming that drivers are “self-governing contractors.” The firm thinks the bill misjudges its business in the state and that the procedure is still premature. Uber has earlier stated that treating drivers as workers might restrict their flexibility to operate when they like, but critics have disputed that this allows Uber evade minimum salary and other labor perks.
Uber might encounter an uphill fight, although. Similar to other states, New Jersey has a test to decide if individuals are contractors, and it thinks they are—it does not buy Uber’s claim that the ridesharing service, not transportation, is its primary business. So long as the state preserves that view, it will carry on to demand back taxes and may take lawful action if Uber still declines to pay.