The State of NJ has launched an investigation and are requiring Uber to pay $650 million in unemployment taxes and other fines for its drivers, who the state says are employees.
According to a Bloomberg Law article published on Thursday by reporter Chris Opfer, New Jersey’s Department of Labor and Workforce Development sent letters to Uber and subsidiary Rasier LLC assessing a total of $523 million in back taxes on ride-hail drivers, following at least four years of inquiries by the state.
Bloomberg's Chris Opfer reported that The New Jersey labor department has been after Uber for unpaid employment taxes for at least four years, according to the documents obtained through an open public records request.
Uber spokeswoman Alix Anfang told Bloomberg Law's Chris Opfer that they are challenging this preliminary but incorrect determination, because "drivers are independent contractors in New Jersey and elsewhere,.”
The report said the NJ Department of Labor's determination is limited to unemployment and disability insurance, but it could also mean that Uber is required to pay drivers minimum wages and overtime under state law. Uber’s costs per driver and those of Lyft could jump by more than 20% if they are forced to reclassify workers as employees.
It is not clear if Uber paid any of a $54 million court judgment that ordered the company to pay overdue unemployment and temporary disability insurance contributions, according to the Blomfield Law report.