The state of New Jersey recently recovered more than $19 million against the ridesharing service Lyft, which it accused of wrongly misclassifying more than 100,000 of its drivers as independent contractors instead of employees.
It’s a wakeup call for any employer that is even the slightest bit lax about taking the time to properly classify all of its workers.
The massive payment was announced last month by the New Jersey Department of Labor and the state’s attorney general.
The seeds for the payout were sown when a number of Lyft drivers filed claims for unemployment insurance and disability benefits. Those claims triggered a state audit, which revealed that Lyft had not made any contributions to the corresponding state funds on the drivers’ behalf.
The audit covered a four-year period beginning in 2014. Following its review of the company’s books and records for that timeframe, the state slapped Lyft with an assessment of more than $10.8 million in past due contributions to the proper funds. It also tacked on another $8.5 million in penalties and interest.
Lyft initially contested the state department of labor’s findings. As a result, the case was transferred to the state’s Office of Administrative Law for a scheduled hearing.
Though it contested the findings, Lyft paid the $10.8 million to stop interest from continuing to accrue. Then, in August of this year — and just days...
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