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This is the most amount of money New Jersey has received for this type of case, and covers 297,866 drivers.
The payment follows New Jersey Department of Labor (NJDOL) audits that assessed Uber and its subsidiary Rasier LLC a combined $78 million in past-due contributions plus penalties and interest of $22 million.
Employers who misclassify workers as independent contractors skip their contributions to the UI trust fund, leaving every other employer in the state to pay for their delinquency, the NJDOL explained.
When a worker is misclassified as an independent contractor they lose the rights that employees are entitled to including minimum wage, overtime pay, workers’ compensation coverage, unemployment insurance, earned sick leave, family leave or other benefits.
They are not protected by workplace safety laws, equal pay protections and a host of other employment-related rights we so often take for granted.
Per federal standards, New Jersey and every other state is required to audit one percent of businesses each year for compliance with unemployment insurance contribution requirements. Additionally, the NJDOL may audit a company if a complaint is filed, or if workers seek unemployment or disability benefits and there is no record of their employer having contributed to those benefit funds.
In the audit of Uber and Rasier, NJDOL examined the companies’ books from 2014 to 2018. They were originally assessed a combined $523 million in past-due contributions plus penalties and interest of up to $119 million, but those figures were rough estimates based on incomplete data, as allowed by law, because the companies did not cooperate and share their complete payroll records during the audit.
The companies contested the NJDOL's findings, and the case was transferred to New Jersey’s Office of Administrative Law. The companies have now paid a revised assessment of $100 million – based on additional information from Uber and Rasier, which was more complete and more accurate than the initial data provided.
All contributions, penalties and interest received are returned to the funds used to pay worker benefits, and to cover related expenses of administering and protecting the trust fund for all NJ workers and employers.
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