Uber pays $100 million in back taxes to New Jersey for misclassifying drivers

Ride-hailing platform Uber earlier this week paid the state of New Jersey $100 million in back taxes after the company tried being excessively clever to avoid paying benefits to its drivers.

Reportedly, New Jersey's Department of Labor and Workforce Development had fined Uber and its subsidiary Raiser in 2019 over unpaid unemployment taxes for the period 2014-2018.

Uber classified its drivers as self-employed which allowed the company to withhold the required benefits. Consequently, the drivers lost the right to overtime pay, paid sick leave, family leave, overtime pay, and most importantly minimum wage.

Remarking that the state will not tolerate such companies, New Jersey's acting attorney general, Matt Platkin said, "We will not tolerate companies that misclassify their workers, thereby denying employees vital benefits and dodging their obligation to contribute to programs that benefit the workforce."

Meanwhile, Uber in a statement did not directly admit that it had avoided paying benefits to its employees.

"Drivers in New Jersey and nationally are independent contractors who work when and where they want - an overwhelming amount do this kind of work because they value flexibility. We look forward to working with policymakers to deliver benefits while preserving the flexibility drivers want." read the statement from the company.

Despite being a worldwide, major cab-riding platform, Uber has a rather shady record of violating the regulations and later coughing up fines to brush the matters under carpet.

As reported by WION, in July, the San Franciso based company admitted that it knew about the data breach in 2016 that affected 57 million customers and yet failed to inform the public or US Federal Trade Commission (FTC).

Uber only confessed to the US prosecutors about its crime so as to avoid being levelled with criminal charges.

It is pertinent to note that Uber had to pay a fine of $148 million to all 50 US states in September 2018, to settle the claims. However, given that Uber's market value amounted to $76 billion in the same year, many experts called it a mockery of the system.

(With inputs from agencies)

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