Uber has paid the US state of New Jersey $100 million in taxes and penalties for labeling nearly 300,000 of its drivers as self-employed and withholding claimed benefits, officials said Tuesday.
But the ride-sharing giant insisted its drivers were in fact independent contractors, saying it paid only a fraction of the $1 billion originally demanded by the northeastern state.
The payment stems from a government audit of Uber's operations in New Jersey between 2014 and 2018, which concluded that the company misclassified its drivers as self-employed.
Because of this, the New Jersey Department of Labor said in a statement that Uber drivers lost their right to minimum wage, overtime pay, unemployment insurance, earned sick leave, family leave, and other benefits.
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"We will not tolerate businesses that misclassify their workers, denying employees important benefits and avoiding their obligation to contribute to programs that benefit the workforce," said Acting Attorney General Matt Platkin.
New Jersey Labor Commissioner Robert Asaro-Angelo said work flexibility should not come at the expense of fringe benefits.
"Let's be apparent: There is no excuse why quick or on-demand employees who operate relaxed hours or minutes shouldn't be regaled the identical as other workers in New Jersey or any different form," he said in a report.
The classification of ride-sharing company drivers as employees or independent contractors has long been a topic of debate among business and government representatives, with no clear consensus yet.
Uber defended its position on Tuesday.
"Drivers in New Jersey and across the country are distinct contractors UN tool manages once and wherever they enjoy. The general does that completely work as an effect of they just like the flexibility," the corporate previous during a message to fetoprotein. "We accept to figure with lawmakers to provide the benefits and support the feebleness that drivers need."
It was unclear whether New Jersey authorities still considered Uber in violation of its activities in the years after the audit.
The New Jersey Department of Labor did not directly reply to AFP's appeal for analysis.
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