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Uber Hit With $650 Million Employment Tax Bill in New Jersey

jocker12

Well-Known Member

Uber Technologies Inc. owes New Jersey about $650 million in unemployment and disability insurance taxes because the rideshare company has been misclassifying drivers as independent contractors, the state’s labor department said.

Uber and subsidiary Rasier LLC were assessed $523 million in past-due taxes over the last four years, the state Department of Labor and Workforce Development said in a pair of letters to the companies. The rideshare businesses also are on the hook for as much as $119 million in interest and penalties on the unpaid amounts, according to other internal department documents.

“We are challenging this preliminary but incorrect determination, because drivers are independent contractors in New Jersey and elsewhere,” Uber spokeswoman Alix Anfang told Bloomberg Law

The New Jersey labor department has been after Uber for unpaid employment taxes for at least four years, according to the documents, which Bloomberg Law obtained through an open public records request.

Uber extended declines on news of New Jersey’s efforts, falling as much as 3.9%. Ridehailing competitor Lyft Inc. also dropped.

The state’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, according to Bloomberg Intelligence.

The notices mark the latest attack on the rideshare companies’ business model, which treats drivers as self-employed entrepreneurs rather than employees—a classification that deprives the workers of certain benefits. Uber and Lyft recently pledged $30 million each to fight a new California law that is expected to force them to reclassify drivers as employees. They’re also prepping for a similar lobbying battle in New York, where lawmakers are planning to take up gig worker legislation next year.

“I expect we may see more of this,” Shannon Liss-Riordan, an attorney who has sued Uber on behalf of drivers in California and Massachusetts, said of New Jersey’s tax claim against Uber. “Uber and Lyft, by misclassifying drivers, are harming not only the drivers but also the states and the public at large. The money that they’re not paying into the unemployment and disability systems is being picked up by the states and the taxpayers.”

New Jersey informed Uber in 2015 that it had obtained a court judgment ordering the company to pay about $54 million in overdue unemployment and temporary disability insurance contributions. It’s not clear whether the company ever paid any of that bill.

The state labor department, through a spokeswoman, declined to comment on the Uber situation. Labor Commissioner Robert Asaro-Angelo said in a prepared statement that “cracking down on employee misclassification” is a “priority” for Gov. Phil Murphy’s (D) administration.

“For those who say properly enforcing our unemployment laws will stifle worker flexibility, let’s be clear: there is no reason temporary, or on-demand workers can’t be treated like other employees who work flexible hours for short durations,” Asaro-Angelo said.

Uber in April told the state labor department that it disagreed with the determination that drivers are employees and requested a hearing on the issue, but it isn’t clear whether a hearing has been scheduled.

Audit Launched Last Year
The state labor department sent surveys to Uber and Lyft drivers over the last year seeking information about their work arrangements and tax status. The department audits 1% of employers each year for potential worker misclassification.

Since Oct. 23, the department also has determined that 65 drivers who listed Uber, Rasier or Lyft as their employer in unemployment-insurance-benefits claim forms are employees of those companies and therefore eligible to seek jobless benefits. Drivers who moonlight for the companies to supplement income from other jobs are additionally required to report rideshare earnings for eligibility determination purposes as a result of the state’s determination that they are employees.

The state labor department didn’t provide any documents in response to Bloomberg Law’s request for unemployment insurance assessments against Lyft.

Gig employers—like Uber, Lyft, home cleaning service Handy, and food delivery operator Postmates—pitch themselves as platform providers that simply connect drivers and other service providers to customers. That argument has satisfied federal regulators during the Trump administration.

The federal Labor Department and the National Labor Relations Board have recently issued guidance indicating they’re not likely to pursue Uber or Lyft for alleged misclassification. The DOL in an April opinion letter said workers at an unnamed “virtual marketplace” aren’t employees for federal wage and hour purposes because the company acts as a “referral business” that links workers to new opportunities. The NLRB’s top lawyer, in a memo made public two weeks later, said Uber drivers are independent contractors, excluded from protections for union and other activity.

Strict on Classification
Uber and other gig employers are still trying to fight off lawsuits filedunder more restrictive state laws across the country.

That includes New Jersey, which uses a version of the “ABC” test to determine whether workers are employees or contractors. In order to classify workers as contractors, state law requires a company to show that it doesn’t control the work and that the service provided is outside of its “usual course” of business, or outside of the places of business where the services are otherwise performed.

“Not a day goes by when I don’t speak to at least two clients about how to enhance their compliance with independent contractor laws, in particular those with ‘ABC’ laws,” says Richard Reibstein, a business lawyer for Locke Lord in New York.

Uber, Lyft, and other online platforms unsuccessfully lobbied to stop a new law in California that uses a similar test to distinguish between contractors and employees. The companies had offered to institute minimum wages, portable benefits like paid sick leave, and some collective bargaining rights in exchange for being carved out of the new law. They’re expected to push to get a referendum added to the ballot next year that would exempt platform companies the law.

Some New Jersey drivers told Bloomberg Law that they would prefer to remain contractors and keep the flexibility to choose when and where the work. Worker advocates say that’s a false choice rideshare operators offer to skirt their basic responsibilities.

“This would be life-changing for thousands of drivers, to know that they will be earning at least the minimum wage,” Bhairavi Desai, founder of the New York Taxi Workers Alliance, told Bloomberg Law. “The companies being required to pay into the unemployment insurance fund will mean that they can’t just toss drivers off the app.”
 

tohunt4me

Well-Known Member

Uber Technologies Inc. owes New Jersey about $650 million in unemployment and disability insurance taxes because the rideshare company has been misclassifying drivers as independent contractors, the state’s labor department said.

Uber and subsidiary Rasier LLC were assessed $523 million in past-due taxes over the last four years, the state Department of Labor and Workforce Development said in a pair of letters to the companies. The rideshare businesses also are on the hook for as much as $119 million in interest and penalties on the unpaid amounts, according to other internal department documents.

“We are challenging this preliminary but incorrect determination, because drivers are independent contractors in New Jersey and elsewhere,” Uber spokeswoman Alix Anfang told Bloomberg Law

The New Jersey labor department has been after Uber for unpaid employment taxes for at least four years, according to the documents, which Bloomberg Law obtained through an open public records request.

Uber extended declines on news of New Jersey’s efforts, falling as much as 3.9%. Ridehailing competitor Lyft Inc. also dropped.

The state’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, according to Bloomberg Intelligence.

The notices mark the latest attack on the rideshare companies’ business model, which treats drivers as self-employed entrepreneurs rather than employees—a classification that deprives the workers of certain benefits. Uber and Lyft recently pledged $30 million each to fight a new California law that is expected to force them to reclassify drivers as employees. They’re also prepping for a similar lobbying battle in New York, where lawmakers are planning to take up gig worker legislation next year.

“I expect we may see more of this,” Shannon Liss-Riordan, an attorney who has sued Uber on behalf of drivers in California and Massachusetts, said of New Jersey’s tax claim against Uber. “Uber and Lyft, by misclassifying drivers, are harming not only the drivers but also the states and the public at large. The money that they’re not paying into the unemployment and disability systems is being picked up by the states and the taxpayers.”

New Jersey informed Uber in 2015 that it had obtained a court judgment ordering the company to pay about $54 million in overdue unemployment and temporary disability insurance contributions. It’s not clear whether the company ever paid any of that bill.

The state labor department, through a spokeswoman, declined to comment on the Uber situation. Labor Commissioner Robert Asaro-Angelo said in a prepared statement that “cracking down on employee misclassification” is a “priority” for Gov. Phil Murphy’s (D) administration.

“For those who say properly enforcing our unemployment laws will stifle worker flexibility, let’s be clear: there is no reason temporary, or on-demand workers can’t be treated like other employees who work flexible hours for short durations,” Asaro-Angelo said.

Uber in April told the state labor department that it disagreed with the determination that drivers are employees and requested a hearing on the issue, but it isn’t clear whether a hearing has been scheduled.

Audit Launched Last Year
The state labor department sent surveys to Uber and Lyft drivers over the last year seeking information about their work arrangements and tax status. The department audits 1% of employers each year for potential worker misclassification.

Since Oct. 23, the department also has determined that 65 drivers who listed Uber, Rasier or Lyft as their employer in unemployment-insurance-benefits claim forms are employees of those companies and therefore eligible to seek jobless benefits. Drivers who moonlight for the companies to supplement income from other jobs are additionally required to report rideshare earnings for eligibility determination purposes as a result of the state’s determination that they are employees.

The state labor department didn’t provide any documents in response to Bloomberg Law’s request for unemployment insurance assessments against Lyft.

Gig employers—like Uber, Lyft, home cleaning service Handy, and food delivery operator Postmates—pitch themselves as platform providers that simply connect drivers and other service providers to customers. That argument has satisfied federal regulators during the Trump administration.

The federal Labor Department and the National Labor Relations Board have recently issued guidance indicating they’re not likely to pursue Uber or Lyft for alleged misclassification. The DOL in an April opinion letter said workers at an unnamed “virtual marketplace” aren’t employees for federal wage and hour purposes because the company acts as a “referral business” that links workers to new opportunities. The NLRB’s top lawyer, in a memo made public two weeks later, said Uber drivers are independent contractors, excluded from protections for union and other activity.

Strict on Classification
Uber and other gig employers are still trying to fight off lawsuits filedunder more restrictive state laws across the country.

That includes New Jersey, which uses a version of the “ABC” test to determine whether workers are employees or contractors. In order to classify workers as contractors, state law requires a company to show that it doesn’t control the work and that the service provided is outside of its “usual course” of business, or outside of the places of business where the services are otherwise performed.

“Not a day goes by when I don’t speak to at least two clients about how to enhance their compliance with independent contractor laws, in particular those with ‘ABC’ laws,” says Richard Reibstein, a business lawyer for Locke Lord in New York.

Uber, Lyft, and other online platforms unsuccessfully lobbied to stop a new law in California that uses a similar test to distinguish between contractors and employees. The companies had offered to institute minimum wages, portable benefits like paid sick leave, and some collective bargaining rights in exchange for being carved out of the new law. They’re expected to push to get a referendum added to the ballot next year that would exempt platform companies the law.

Some New Jersey drivers told Bloomberg Law that they would prefer to remain contractors and keep the flexibility to choose when and where the work. Worker advocates say that’s a false choice rideshare operators offer to skirt their basic responsibilities.

“This would be life-changing for thousands of drivers, to know that they will be earning at least the minimum wage,” Bhairavi Desai, founder of the New York Taxi Workers Alliance, told Bloomberg Law. “The companies being required to pay into the unemployment insurance fund will mean that they can’t just toss drivers off the app.”
This just may be

" THE BEGINNING OF THE END".

UBER SHOULD HAVE STAYED A " TECHNOLOGY COMPANY".

IM SUPPOSED TO PAY 20% RENT ON THE UBER APP.

INSTEAD, LOOK WHAT UBER HAS DONE.

NOW THEY DONT WANT TO PAY THE BILL.
 

UberBastid

Well-Known Member
This just may be

" THE BEGINNING OF THE END".

UBER SHOULD HAVE STAYED A " TECHNOLOGY COMPANY".

IM SUPPOSED TO PAY 20% RENT ON THE UBER APP.

INSTEAD, LOOK WHAT UBER HAS DONE.

NOW THEY DONT WANT TO PAY THE BILL.
Twenty percent?
Is that all you're paying Uber?
You sure?
 

Wonkytonk

Well-Known Member
That's the trend. Right now we're looking at California, New Jersey, one of the Swiss states, and undoubtedly more to follow, the northwestern states will probably shortly follow, also Illinois through Chicago, and New York, and there's no way they have enough to cover the bill if every market started demanding the same. The thing is they all will eventually declare drivers employees and declare them employees retroactively which leaves them on the hook for billions. They're either going to have to significantly increase the fares and keep the difference, or lower driver pay. Those aren't the only options but no doubt those are the only two they'll see.
 

UberBastid

Well-Known Member
That's the trend. Right now we're looking at California, New Jersey, one of the Swiss states, and undoubtedly more to follow, the northwestern states will probably shortly follow, also Illinois through Chicago, and New York, and there's no way they have enough to cover the bill if every market started demanding the same. The thing is they all will eventually declare drivers employees and declare them employees retroactively which leaves them on the hook for billions. They're either going to have to significantly increase the fares and keep the difference, or lower driver pay. Those aren't the only options but no doubt those are the only two they'll see.
I think they should join PG&E in their bankruptcy ... and let the State of California take them over too.
Just one more large business that can be nationalized .. Socialism.
How about it guys ... wanna work for Governor "Any-Twosome" Newsome?
 
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Reactions: njn

L DaVinci

Well-Known Member
I think they should join PG&E in their bankruptcy ... and let the State of California take them over too.
Just one more large business that can be nationalized .. Socialism.
How about it guys ... wanna work for Governor "Any-Twosome" Newsome?
Please get an education before you spew your lies.
 

I will crack Lyft hacks

Well-Known Member
This just may be

" THE BEGINNING OF THE END".

UBER SHOULD HAVE STAYED A " TECHNOLOGY COMPANY".

IM SUPPOSED TO PAY 20% RENT ON THE UBER APP.

INSTEAD, LOOK WHAT UBER HAS DONE.

NOW THEY DONT WANT TO PAY THE BILL.
It is all their own doing.
If they came out today and stated we want to be a tech company and charge 20% fee, and let the market decide rates. All drivers would support them against their legal enemies.

They did this to themself,
IDIOT NARCASSISTS
I think they should join PG&E in their bankruptcy ... and let the State of California take them over too.
Just one more large business that can be nationalized .. Socialism.
How about it guys ... wanna work for Governor "Any-Twosome" Newsome?
wait! What?

Worker classification rules are socialist?🤷🏻‍♂️

Paying into EDD for driver unemployment benefit and workers comp is socialist?🤦‍♀️

Workers who get injured on the job and get protection are under socialist system?🤯

What are you actually saying?

What does worker classification mis use and exploitation have to do with a single governor of the moment at one state.

Let’s be clear, it’s not “ twosome nonsense Newsome”.

It’s a new industry that has been enjoying total lawlessness being somewhat corrected.

As the other poster said in CAPS

It’s their own doing! The tec companies we mean.

Has absolutely nothing to do with a social system used mostly in EU known as socialism.

Do you understand Germany for example is the strongest International economy, people work hard and have certain protections. Great transportation system, great medical system. What is actually wrong with Germany’s system in your limited world view?

Are you afraid one day we could be as solid as Germany and manufacture stuff again!
🇺🇸
 

UberBastid

Well-Known Member
It is all their own doing.
If they came out today and stated we want to be a tech company and charge 20% fee, and let the market decide rates. All drivers would support them against their legal enemies.

They did this to themself,
IDIOT NARCASSISTS

wait! What?

Worker classification rules are socialist?🤷🏻‍♂️

Paying into EDD for driver unemployment benefit and workers comp is socialist?🤦‍♀️

Workers who get injured on the job and get protection are under socialist system?🤯

What are you actually saying?

What does worker classification mis use and exploitation have to do with a single governor of the moment at one state.

Let’s be clear, it’s not “ twosome nonsense Newsome”.

It’s a new industry that has been enjoying total lawlessness being somewhat corrected.

As the other poster said in CAPS

It’s their own doing! The tec companies we mean.

Has absolutely nothing to do with a social system used mostly in EU known as socialism.

Do you understand Germany for example is the strongest International economy, people work hard and have certain protections. Great transportation system, great medical system. What is actually wrong with Germany’s system in your limited world view?

Are you afraid one day we could be as solid as Germany and manufacture stuff again!
🇺🇸
No, no, no.
I didn't say all that

The def of Socialism is that the gov't takes over all means of production.
So, they 'nationalize' private business, then run it into the ground.
I'm suggesting that Any-Twosome Newsome do exactly that ... to Uber.

But, yea, Uber IS evil. Just as evil as the gov't.
I suspect they deserve each other.

Germany has a strong economy, for sure.
But, kinda stagnant right now.
 
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