Uber Paying $100 Million In Back Taxes Is A Positive Sign For Gig Workers

From Forbes, Tom Spiggle discusses Uber’s settlement of claims by the state of New Jersey for back taxes and what that means for the worker classification debate. Tom writes:

The arrival of the gig economy placed a renewed emphasis on the problem of worker misclassification. This usually refers to employers classifying employees improperly as independent contractors. There are a variety of reasons why an employer might do this, but one common reason is to save money on payroll and employment taxes, like state unemployment. But companies who claim their workers are independent contractors don’t always get away with not paying their fair share of payroll taxes, as we recently saw in New Jersey with Uber Technologies Inc. and Raiser LLC.

New Jersey Department of Labor and Workforce Development Gets $100 Million in Back Taxes

Uber Technologies Inc. (Uber) and Raiser LLC (Raiser) made the news recently because they agreed to pay $100 million in what amounts to unpaid state payroll taxes to the New Jersey Department of Labor and Workforce Development’s (NJDOL) Unemployment Trust Fund.

NJDOL asserts that Uber and Raiser (a subsidiary of Uber) had to pay this money because they misclassified their drivers as independent contractors instead of employees. This misclassification then led to Uber and Raiser not paying their share of New Jersey payroll taxes for things like unemployment, workforce development and temporary disability.

According to the New York Times, this tax issue started back in 2019 after an audit by the NJDOL concluded that Uber and Raiser owed four years’ worth of back taxes from 2014 to 2018 totaling $530 million, with another $119 million in interest.

Uber (and presumably Raiser) disagreed with this conclusion and the case got sent to the New Jersey Office of Administrative Law. However, before a final decision could be made, Uber and Raiser agreed to pay $100 million, consisting of $78 million in back taxes and $22 million in penalties and interest.

Read the full story at Uber Paying $100 Million In Back Taxes Is A Positive Sign For Gig Workers

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