Gig Work Takes Another Hit

Last week the state of New Jersey determined that Uber has been misclassifying its drivers as independent contractors and now owes the state $649 million in unemployment and disability insurance taxes. The fine consists of $523 million for four years of past-due taxes and $119 in interest and penalties. Uber has stated they will challenge the ruling.

According to Bloomberg, while the ruling is currently only for unemployment and disability, it also poses the question as to whether Uber must pay minimum wage and overtime as well.

The ruling comes on the heels of a California Supreme Court ruling modifying the analysis to properly classify workers as independent contractors, as discussed in this article. New York will be taking on gig worker legislation in 2020, and we can anticipate that more states will as well. On the other hand, recent guidance from the federal Labor Department and the National Labor Relations Board implies they will not be pursuing gig employers like Uber for misclassification.

Misclassification of independent contractors is likely to be an ongoing discussion for 2020. Employers in any state will be well served by auditing their independent contractor relationships to be sure they comply with state and federal requirements. Employers Council will monitor changes and publish updates.