Uber & NJ at odds over what to call drivers, $650M taxes owed

[nitpicker]

https://nj1015.com/uber-nj-at-odds-over-what-to-call-drivers-650m-taxes-owed/

Uber & NJ at odds over what to call drivers, $650M taxes owed

TRENTON — Uber has said it will challenge the results of a state Department of Labor audit that could leave the ride-share company on the hook for millions in unpaid unemployment and disability taxes.

"We are challenging this preliminary but incorrect determination, because drivers are independent contractors in New Jersey and elsewhere,” an Uber spokeswoman said.

State Labor Department officials said Thursday they cannot talk about specific cases, but shared a written statement from the commissioner on the general issue of misclassification in the workforce.

“Over the past year alone, misclassification has cost New Jersey businesses $300 more per employee because of employers not properly funding the Unemployment Insurance Trust Fund. Our 244,000 employers who play by the rules should not have to give a free ride to those who don’t," state Labor Commissioner Robert Asaro-Angelo said.

“Additionally, employees who are wrongly classified as independent contractors in effect pay double FICA taxes because they pay both their own and the portion that their employer would have paid if they were properly classified. When independent contractors file for unemployment or disability insurance, their benefits are paid by taxpayers because their employer didn’t contribute. This defiance of the law puts honest business owners at an unfair disadvantage."

Bloomberg Law reported that documents obtained through its own open public records request showed the state Labor Department "has been after Uber for unpaid employment taxes for at least four years," for unpaid taxes and penalties collectively amounting to nearly $650 million.

"Worker classification is important because it determines if an employer must withhold income taxes and pay Social Security, Medicare taxes and unemployment tax on wages paid to an employee," according to the Internal Revenue Service (IRS) on its website. The IRS notes earnings of a person working as an independent contractor are subject to self-employment tax.

State officials said the Labor Department is required by law to randomly audit 1% of New Jersey businesses each year, while an investigation also could begin based on a "claim filed by a misclassified worker (for unemployment or disability benefits, for example)" or "a complaint against an employer for a work rights violation, such as not receiving overtime pay."
(snip)

[Throck]

1. Has any Uber driver ever become a millionaire?

My friends who are Uber drivers use it to make ends meet. Enough with the petty taxes on the working class.

[SWBTATTReg]

3. Seems like the company itself is the only one making a killing...no one else is, and the drivers...

are still struggling. Something wrong here. Especially when the skill set of the drivers are heavily required in commuting through heavy traffic areas, etc., which is where probably 90% of Uber exists...believe me, you wouldn't be able to get an Uber out in the boonies...believe me, I've tried when I needed alternate transportation one time. So, this fancy service still didn't help me and when I do use in urban areas, cabs are just as cheap and plentiful too.

IMHO, All Uber and Lytf were, are the new wave of stock scams and no more (like WeWork, etc.).

[MichMan]

2. It appears to be a complicated issue

My wife was hired as an independent contractor "consultant" several years ago, but by all accounts she was an employee, so I understand what some employers are trying to do to put the burden of taxes on the employee.

While it doesn't seem right that so many people are misclassified, on the other hand, the drivers do set their own hours and work as much or little as they want with no permission needed, so it seems based on that alone, Uber has a good case.