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November 15, 2019 12:45 am

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

New Jersey's labor department says Uber owes the state about $650 million in unemployment and disability insurance taxes because the rideshare company has been misclassifying drivers as independent contractors. Bloomberg Law News reports: 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. 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. 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. [...] 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 is not clear whether the company ever paid any of that bill. "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.

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