Lyft Settles New Jersey Dispute Over Misclassification of Drivers for $19.4 Million
Lyft Settles New Jersey Classification Dispute for $19.4 Million
Ride-hailing company Lyft has reached a financial settlement with the New Jersey Department of Labor and Workforce Development, paying $19.4 million to resolve claims that it improperly classified over 100,000 drivers as independent contractors.
In a statement, New Jersey Labor Commissioner Robert Asaro-Angelo said, "Temporary or on-demand workers can be treated like other employees, and our regulators have over the last several years said that Lyft and Uber's alleged misclassifications deprive drivers of benefits including a minimum wage, overtime pay, and sick leave."
The audit found that Lyft did not make contributions to state funds from 2014 to 2017, denying drivers unemployment compensation, temporary disability benefits, and family leave. As a result, Lyft was assessed more than $10.8 million in past-due contributions, plus over $8.5 million in penalties and interest.
Lyft believes that drivers prefer working on their own terms rather than as employees. However, the company withdrew its request for a hearing regarding an audit by New Jersey's Department of Labor and Workforce Development, and will not be pursuing further challenges to the assessment.
The payment was made to stop interest from accruing, and the remainder was paid after ending its challenge. The company reached a similar $27 million settlement with Massachusetts in June 2024.
It's worth noting that the specific audit findings, the status of the Massachusetts settlement, and the name of the head of the New Jersey Department of Labor and Workforce Development who conducted the investigation and published the review results regarding Lyft were not provided in the current paragraph.
Despite the settlement, Lyft continues to maintain that it disagrees with the findings that it improperly classified drivers as independent contractors. The company did not provide any new information about its contributions to state funds, the amount it paid to stop interest from accruing or the remainder it paid after ending its challenge, or any new financial settlement or penalties.
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