Uber agreed to pay New Jersey $100 million in back taxes

• Uber agreed to pay New Jersey $100 million in back taxes.
• New Jersey demanded $650 million in back taxes in 2019, saying the company had misclassified drivers as contractors.

Uber has agreed to hand over $100 million in back taxes to the state of New Jersey because it classified its drivers as contractors rather than employees, The New York Times reported.

The New Jersey Department of Labor and Workforce Development first accused Uber of owing $650 million in back taxes in November 2019.

New Jersey maintained that Uber had misclassified its drivers as contractors for the previous four years, meaning it avoided paying tax for them.

Whether or not Uber considers its drivers to be employees has been a major point of contention between the company and regulators. Historically Uber has argued its drivers are contracted workers meaning they are not entitled to benefits including overtime and sick leave.

The settlement it has reached with New Jersey, although far reduced from the original $650 million bill, is a significant concession from the firm.

"This shows that these workers in New Jersey are presumed to be employees," Robert Asaro-Angelo, commissioner of New Jersey's Department of Labor, told The New York Times.

"No matter what a company's business model or what their technology is, workers have rights," he added.

An Uber spokesperson appeared to assert the company still sees drivers as contractors in a statement to Insider.

""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," the spokesperson said.

The New Jersey Department of Labor and Workforce Development did not immediately respond when contacted by Insider outside of usual US working hours.