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Uber pays NJ $100m in back taxes for misclassifying drivers

The use of employment labels of ‘independent contractor’ and ‘gig-worker” are getting dicey, even leaving Uber $100mil in debt.

uber robotaxi in the city

New Jersey is stepping up for Uber drivers.

Compared to classic employment roles, gig workers often get shafted in the benefits and protections department. Uber and its subsidiaries have coughed up $100 million in back taxes after the New Jersey auditors called bunk on classifying drivers as independent contractors. Both the New York Times and CNN Business, amongst others, are reporting on this massive shake-up in the movement for rights for gig workers.

The classification of workers as independent contractors has long been a get-out-of-jail-free card for employers looking to cut costs. Workers labeled as independent contractors are denied access to legal protections such as temporary disability and family leave insurance, or insurance of any kind. It also means that employers dodge paying taxes toward unemployment coverage. There is woefully inadequate regulation around this classification regarding the rise of the modern gig economy and the “ethical” treatment of workers.

As a large amount of the workforce has transitioned to a more gig-based employment model, the typical “independent contractor” is that one neighbor of yours running food orders or chauffeuring drunks around to make ends meet. These aren’t entrepreneurs, small business owners, and consultants operating as freelancers or self-employed- these are people cobbling together a living on gig work. The difference is fundamental.

Corporate interests have long been fighting to keep gig workers classified as independent contractors. Interests advocating on behalf of gig workers say otherwise. It’s been in court across the country for a while now. The New Jersey Department of Labor collecting these funds from Uber is a powerful precedent.

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Labor Commissioner Robert Asaro-Angelo did not mince words in calling out corporate entities that make their buck off the backs of gig workers:

“For over a century, our governors, legislatures, and voters have made New Jersey one of the best states for workers. We will not bow to the whims of corporations’ latest business models that are based on eroding long-standing protections.”

Juicy, but it gets better. In support of the precedent that gig workers are deserving of access to all the benefits of classic employment models, Commissioner Asaro-Angelo also provided us with this gem:

“These companies often repeat the false premise that being an employee stifles flexibility, which is just not true. Let’s be clear: there is no reason temporary, or on-demand workers who work flexible hours, or even minutes at a time can’t be treated like other employees in New Jersey or any other state.”

I think I’d like to shake this guy’s hand.

I also think we shouldn’t exploit people!

Let’s be frank: if your entire business model is only feasible because you aren’t protecting the basic human needs of the people doing the labor?

That isn’t good ethics and we can (and should) do better.

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Written By

Rev. Delilah Redfield (she/her) is a queer, neurodivergent nerd with disabilities who spends her time writing, reading, voice acting, and making art when she isn't at her day job saving the environment. She is a career scientist, ordained minister, and cat mom.

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