Richard Reibstein, co-head of Locke Lord’s Independent Contractor Misclassification and Compliance Practice, was quoted by Law360 on Uber’s recent payout of $100 million in back taxes to New Jersey after an audit concluded that hundreds of thousands of drivers were allegedly classified as independent contractors instead of employees. This settlement shines a light on liability for employers regarding misclassification, and, more notably, states could take similar action to seek back taxes, Reibstein observed: "When a company pays a nine-figure amount dealing with the classification of their workers, other states take note."
He also noted that with its payment to New Jersey, Uber doesn't have to reclassify workers as independent contractors, and the payment doesn't directly result in back wages or for workers. “Their interest is to shore up the public unemployment insurance fund, which they have now done,” Reibstein said.
Read the full article on Law360 here (subscription may be required).
Sign up for our newsletter and get the latest to your inbox.