We want to give you as much information as possible here, but because this is all so new, much of the process you need to go through to secure unemployment compensation is still in flux. New Jersey informed Uber in 2015 that it had obtained a court judgment ordering the company to pay about $54 million in overdue unemployment and temporary disability insurance contributions. It creates a test that state agencies must apply before granting benefits, and which they have yet to do in many drivers’ cases. “Many self-employed ride-share and delivery drivers intend to apply for loans and other federal relief available to independent contractors,” the companies wrote, and they “worry that making an inaccurate representation that they are employees” could preclude that, the email said. TRENTON – Uber owes the state of New Jersey about $650 million in back unemployment taxes, disability insurance and penalties, because the rideshare company incorrectly classifies its … I have read through all of the state’s unemploy m ent … For uberX and uberXL in NJ that means valid insurance with coverage that meets or exceeds New Jersey’s minimum financial responsibility requirements, with the driver's name on the insurance policy. The notices mark the latest attack on the rideshare companies’ business model, which treats drivers as self-employed entrepreneurs rather than employees—a classification that deprives the workers of certain benefits. The CARES Act will pay independent contractors unemployment benefits. Traditionally, Unemployment doles out around half of your salary or if you make over a certain threshold, you will be given around $500 (give or take per state) per week. Paying Back Unemployment in Other States. Uber Technologies Inc. is indebted to the State of New Jersey for approximately $650 million for disability and unemployment insurance taxes. Uber Driver Filing for Unemployment in NJ Hello, I am currently filing for unemployment on behalf of my father. Open Letter to State Unemployment Insurance Agencies on Uber & Lyft Drivers We are professors and researchers, each of whom has expertise relevant to the question of whether drivers of transportation companies Uber and Lyft are employees for purposes of state unemployment insurance. To learn more about a subscription click here. Since Oct. 23, the department also has determined that 65 drivers who listed Uber, Rasier or Lyft as their employer in unemployment-insurance-benefits claim forms are employees of those companies and therefore eligible to seek jobless benefits. Uber, Lyft, and other online platforms unsuccessfully lobbied to stop a new law in California that uses a similar test to distinguish between contractors and employees. We’ve made it a priority to get them out.”. The state labor department, through a spokeswoman, declined to comment on the Uber situation. We’re also developing resources to help make it easier for you to request financial assistance now available from many governments. Bloomberg Law News reports: Uber and subsidiary Rasier LLC were assessed $523 million in past-due taxes over the last four years, the state Department of Labor and Workforce … Employers in California and other states are required to contribute to state unemployment trust funds on behalf of employees who might claim benefits. 1. But Uber and Lyft are contesting these decisions in many states and are not paying into the state unemployment insurance funds. For uberX and uberXL in NJ that means valid insurance with coverage that meets or exceeds New Jersey’s minimum financial responsibility requirements, with the driver's name on the insurance policy. Update (3-27-2020): Due to the new stimulus bill that was signed into law on 3-27-2020, Uber and Lyft drivers will be able to file for unemployment benefits for 4 months. Andrew Stettner, an expert on unemployment insurance at the Century Foundation, a liberal think tank, said that the U.S. Labor Department could order California to desist but that it was unlikely to require the state to pay back money it had given to drivers. But this is what happens when ultrapowerful app companies with an army of well-paid lobbyists and lawyers are saying they’re going to fight to the bitter end against workers’ ability to demand rights under the law.”. The state’s determination is limited to unemployment and disability insurance, but it could also mean that Uber is required to pay drivers minimum wages and overtime under state law. This includes up to 39 weeks of expanded unemployment insurance. For 2021, the maximum weekly benefit rate is $731. Lyft or Uber drivers can work part time so some wonder if they will still be eligible for unemployment if they work on Lyft and Uber. The state labor department sent surveys to Uber and Lyft drivers over the last year seeking information about their work arrangements and tax status. In New York and New Jersey, among other states, Uber and Lyft drivers are classified as employees for unemployment insurance purposes. Most experts believe that drivers will be deemed employees under the test. Uber Driver Filing for Unemployment in NJ Hello, I am currently filing for unemployment on behalf of my father. The state department of labor assessed those fees, however the matter has not been settled yet by the court system. The New Jersey DOL has determined that Uber misclassified drivers at a cost of $523 million. Jobless Claims by Uber and Lyft Drivers Revive Fight Over Labor Status. Drivers for ride-sharing services like Uber and Lyft can qualify for emergency unemployment insurance if the Covid-19 pandemic forces them off the road, the Labor Department said.. TRENTON, N.J.—. The rideshare businesses also are on the hook for as much as $119 million in interest and penalties on the unpaid amounts, according to other internal department documents. Given the number of drivers in California, the amount to cover unemployment payments would likely be in the billions of dollars. New Jersey's labor department says Uber owes the state about $650 million in unemployment and disability insurance taxes because the rideshare company has been misclassifying drivers as independent contractors. We can’t guarantee anything for you, but we can definitely offer some guidance and advice. The state labor department didn’t provide any documents in response to Bloomberg Law’s request for unemployment insurance assessments against Lyft. Recourse to such assistance has been hampered, however, by the companies’ refusal to provide routine documentation to the state as they fight the law in court. And under a state law passed last year and some previous determinations, the drivers are considered employees in California and should be able to draw traditional unemployment benefits. His executive order made clear that the state law effectively requiring gig companies to classify drivers as employees still applied, entitling drivers to all protections of employment, like minimum-wage rules, overtime pay, workers’ compensation and paid sick leave. Some New Jersey drivers told Bloomberg Law that they would prefer to remain contractors and keep the flexibility to choose when and where they work. They’re also prepping for a similar lobbying battle in New York, where lawmakers are planning to take up gig worker legislation next year. While employers are not required to make contributions to fund pandemic-related claims, they will have to make contributions after the crisis. New Jersey, which has a much higher UI taxable wage base and higher tax rate, recently fined Uber for $530 million in unpaid UI taxes between 2014 and 2018, and $119 million in missed interest payments. “Uber and Lyft, by misclassifying drivers, are harming not only the drivers but also the states and the public at large. That is going to hurt even more if they decide to go after that. But Ms. Su said there was no way to expedite unemployment benefits for drivers under the traditional program without income data from Uber and Lyft. That includes New Jersey, which uses a version of the “ABC” test to determine whether workers are employees or contractors. Lyft declined to comment for this article. Uber has also pointed out that the state’s recent law doesn’t make drivers eligible for unemployment benefits on its own. That may put the state at odds with the rules of the federal program. “I expect we may see more of this,” Shannon Liss-Riordan, an attorney who has sued Uber on behalf of drivers in California and Massachusetts, said of New Jersey’s tax claim against Uber. Don Lively is an Uber driver in Bryan/College Station. “The states are caught in a hard place,” said Brian Chen, a lawyer who focuses on the rights of economically insecure workers at the National Employment Law Project, an advocacy group. This does include rideshare and delivery drivers. The circumstances effectively forced the state to provide unemployment assistance to drivers that they may not be legally entitled to receive, employment experts said. Reeling from a riot, Washington faces rising coronavirus cases. Even though Uber and Lyft have not contributed any money to the Unemployment Fund, the Act allocates sufficient funding to cover all ICs. Across the country, state officials say they’re struggling to … On a website listing frequently asked questions by workers applying for benefits during the pandemic, it instructed gig workers to “list your gig employer as your last employer.” Workers who have employers would typically be eligible for traditional unemployment benefits and therefore ineligible for federal pandemic assistance for the self-employed. Uber and Lyft drivers have lost more than 80 percent of their income as a result of the COVID-19 crisis. The California labor secretary, Julie A. Su, said in an interview that she believed the state’s move to help drivers under the federal program was legal because the government had “emphasized flexibility” in administering the emergency aid. Phil Murphy’s (D) administration. The federal Labor Department and the National Labor Relations Board have recently issued guidance indicating they’re not likely to pursue Uber or Lyft for alleged misclassification. Independent contractors, the self-employed and gig workers like Lyft and Uber drivers are eligible to collect unemployment benefits under the $2.2 trillion coronavirus relief law. 1) Unemployment Insurance – Standard. The U.S. Labor Department did not provide comment for this article. Ms. Su, the state labor secretary, said the purpose of the new approach was to ensure that struggling gig workers could begin to receive benefits rapidly. Allowing drivers to receive the new federal benefits rather than traditional unemployment assistance could help gig-economy companies like Uber and Lyft avoid significant costs in the future. Log in to access all of your Bloomberg Law products. The weekly benefit rate is capped at a maximum amount based on the state minimum wage. States are sometimes tempted to push boundaries because the Labor Department “hasn’t always stood up to them,” Mr. Stettner added. In effect, allowing the drivers to claim the federal benefit helps the companies avoid conceding that they are on the hook for funding state benefits. A similar analysis by officials in New Jersey said Uber would have faced a bill of $530 million for unemployment and disability from 2014 to 2018. A N.J. lawmaker tests positive after being in lockdown in Capitol. “The companies being required to pay into the unemployment insurance fund will mean that they can’t just toss drivers off the app.”, To contact the reporter on this story: Chris Opfer in New York at copfer@bloomberglaw.com, To contact the editors responsible for this story: Terence Hyland at thyland@bloomberglaw.com; Jo-el J. Meyer at jmeyer@bloomberglaw.com; John Lauinger at jlauinger@bloomberglaw.com. 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