Uber and Lyft Owe California $413 Million in Unemployment Insurance Taxes, Study Says

From ViceEdward Ongweso Jr discusses a recent report which conlcudes that Uber and Lyft owe the state of California $413 in unemployment insurance taxes. Unemployment taxes are one of the main liabilities companies avoid by classifying workers as independent contractors. Edward writes:

new report from the UC Berkeley Labor Center finds that Uber and Lyft avoided paying California $413 million in state unemployment insurance (SUI) taxes by misclassifying drivers as independent contractors from 2014 to 2019.

As far back as September 2015, California has ruled in favor of individual Uber drivers being reclassified as employees and thus entitled to unemployment benefits. With the arrival of AB5, a state law that requires companies to reclassify workers as employees, not contractors, if they exert significant control over workers, the business model championed by Uber and Lyft has faced a flood of legal challenges culminating in a landmark lawsuit by the state of California.

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