New Jersey’s Department of Labor and Workforce Development has hit Uber with a massive $650 million bill. The state contends that the ride-hailing company misclassified its drivers as independent contractors, instead of employees.
The Labor Department asserts that Uber financially benefited by its misplaced characterization of its drivers and now demands that the company pay its fair share of unpaid employment taxes. The monies owed are broken down by $523 million in overdue taxes and $119 million in interest and penalties since 2015. Uber officials, however, dispute these findings. “We are challenging this preliminary but incorrect determination,” Uber spokeswoman Alix Anfang told Bloomberg Law.
The rapid emergence of the gig-economy and related job market has substantially altered the way people work. Individuals who need extra money, can’t seem to find a full-time, permanent role or desire a flexible independent lifestyle have taken on these new types of jobs—they act and look like employees, but are treated as independent contractors by the companies they work for. Usually, there is a tech company at the center and the workers carry out the tasks. Companies such as Uber, Lyft, Postmates, Instacart, DoorDash, Grubhub, TaskRabbit, Upworks and Fiverr exemplify this trend.