Uber pays New Jersey $100 million in back taxes because of how drivers are classified as employees.
Satish Deshmukh and Shubham Kalia
Uber Technologies, Inc. (NYSE:UBER) said on Monday that it owed New Jersey $100 million in unemployment taxes because it treated drivers as independent contractors. It also said that it did not agree with the state’s view that drivers were “employees.”
Uber also said that it only paid a small part of what the state had asked for in its audit, which was more than $1 billion. The ride-hailing company paid $12.1 million, and Raiser, which is a part of the company, paid about $88 million.
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“Drivers in New Jersey and all over the country are self-employed and can work when and where they want. ” “We’re looking forward to working with policymakers to help drivers get the benefits they want while keeping the freedom they need,” Reuters was told by a representative of Uber.
Uber and Raiser were both fined by New Jersey’s Department of Labor and Workforce Development in 2019 for not paying unemployment taxes for the years 2014-2018 because drivers were misclassified, which the companies disputed.
The state’s labour department has now said that its first audit was just an estimate made without Uber’s help. This was first reported by the New York Times.
The report said that a later audit, which used worker payroll data from Uber, found that Uber and its unit owed a total of $100 million in back taxes, penalties, and interest.
Reuters asked the department to comment on the old and new audit estimates, but they did not answer.
According to the NYT, New Jersey said that the settlement showed that these workers in the state were “presumed to be employees.” Uber, on the other hand, says that the payment was not part of “a settlement.”
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Robert Asaro-Angelo, the head of the Labor Department, was quoted in the report as saying, “Our efforts to stop misclassification of workers in New Jersey are still going strong.”
