New Jersey Fined Uber with $650 Million Over the Issue of Driver Classification

New Jersey Fined Uber with $650 Million Over the Issue of Driver Classification

Business

New Jersey is the newest state to say Uber should include drivers in its workforce rather than calling them independent contractors. NJ’s labor department said that due to this disarrangement, the ride-hailing giant owes it around $650 million in unemployment taxes and disability insurance. Reportedly, the labor department has been attempting to gain unpaid employment taxes from Uber since 2015. Even more, the company outstanding the state $523 million in overdue taxes along with another $119 million in interest and penalties for the past four years.

On the other hand, Uber has revealed disagreement against the filing. An Uber representative has stated that they are demanding this primary but incorrect determination. Besides, the ride-hailing company is has challenged the fine. Even more, it remains stable on its statement that Uber drivers will remain, independent contractors, let it be any place, New Jersey or worldwide. Whereas, the move has hailed as an achievement by those pressing for Uber’s drivers better-working conditions. Currently, many of the Uber drivers work part-time under the cover of the ride-hailing giant. Still, there are some workers who work for hours and totally depend on the earnings made from ride-hailing.

Driver classification is an issue that government regulators have been analyzing over the past year. Before few months, in September, California has passed a law that could necessitate Uber and other on-demand organizations to re-classify their drivers as employees. The state is also against calling Uber drivers as independent contractors. Even more, the law is ready to go into effect from January 1, 2020, in various regions including Oregon, Washington state, and New York. Meanwhile, ride-hailing companies including Lyft, Uber, and others have decided to fight the Californian law. They are collectively pouring more than $90 million behind a ballot initiative that will take the matter to voters in November 2020. Many of the drivers have called the thing as an insulting one, as they struggle to earn a minimum standard of living.