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posted by martyb on Friday November 15 2019, @09:20PM   Printer-friendly
from the get-to-refile-four-years-of-state-and-federal-taxes,-too dept.

Arthur T Knackerbracket has found the following story:

New Jersey is the latest state to say Uber's drivers should be classified as employees rather than independent contractors. The state's labor department said that because of this misclassification, the ride-hailing company owes it roughly $650 million in unemployment taxes and disability insurance, according to Bloomberg Law.

The labor department reportedly has been trying to get unpaid employment taxes from Uber going back as far as 2015, according to documents obtained by Bloomberg Law. It said the company owed the state $523 million in overdue taxes along with another $119 million in interest and penalties for the last four years. Uber disputes these findings.

"We are challenging this preliminary but incorrect determination," an Uber spokesman said in an email. "Because drivers are independent contractors in New Jersey and elsewhere."

Driver classification is an issue that government regulators have been taking a closer look at over the past year. California passed a law in September that could require Uber and other on-demand companies to reclassify their drivers as employees instead of independent contractors. The law is set to go into effect Jan. 1. New York, Oregon and Washington state have considered similar legislation.


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  • (Score: 4, Insightful) by JoeMerchant on Friday November 15 2019, @10:30PM (22 children)

    by JoeMerchant (3937) on Friday November 15 2019, @10:30PM (#920821)

    The whole contractor/employee distinction needs to end. You hire someone, you pay them, they are your employee. Maybe "employee rights" have gone too far and need to take a step back, but the whole "contractor" class is being used as giant loophole.

    How many states have "Employment at will"? If that's all the job security that being an employee brings, why not let's just call everyone employees and simplify the discussions?

    --
    🌻🌻 [google.com]
    • (Score: 3, Insightful) by darkfeline on Friday November 15 2019, @11:16PM (12 children)

      by darkfeline (1030) on Friday November 15 2019, @11:16PM (#920831) Homepage

      But that's wrong. Contracting company C hires you. Other company B contracts C for work, so you do work that is ultimately for B. Why should B have to pay taxes for you? Why should the government get double taxes for contractors, paid by both B and C? If paying taxes is too expensive for C, then they should be passing that on to B as part of the payment for the contract.

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      • (Score: 2) by Immerman on Saturday November 16 2019, @01:12AM (10 children)

        by Immerman (3985) on Saturday November 16 2019, @01:12AM (#920849)

        Why would B be paying taxes for you? C pays you - they're your employer, and they pay taxes for you. Those cost of those taxes will obviously be passed on to B, but B is not your employer. They don't pay *you* anything, so why would they be on the hook to pay for your taxes?

        Really, you've just described almost every job in the world. You want a hamburger, but don't want to cook it yourself and clean the kitchen, so you go to McDonalds and pay for someone else to do the cooking and cleanup. But you're not paying them directly, so you don't pay their taxes - you're paying the franchise for goods and services, and the franchise pays their employees to provide them.

        Which is exactly what's happening with Uber. Passengers pay for you to give them a ride - but they don't pay *you*, and so they are not your employer, Uber is.

        • (Score: 5, Interesting) by edIII on Saturday November 16 2019, @02:03AM (9 children)

          by edIII (791) on Saturday November 16 2019, @02:03AM (#920853)

          Which is exactly what's happening with Uber. Passengers pay for you to give them a ride - but they don't pay *you*, and so they are not your employer, Uber is.

          Not precisely. It is possible for Uber to accept the money and not be the employer, but then they would actually have to become what they say they really are, which is a SaaS provider.

          Uber claims to be providing all of the tools. Management, CRM, Billing, Marketing, Customer Support, and Sales are all things an independent contractor would want when running a sole proprietor business. The "employee" is a cab company of one, and therefore truly separate from Uber.

          Except Uber dictates all of the costs and pricing. That is the crucial difference where they're Saas argument completely falls apart. What independent contractor would allow pricing to be dictated by a 3rd party vendor of anything?

          Uber needs to accept that if it doesn't want employees, it's going to need to become more like VISA. Uber becomes just a payment processor charging a percentage, and the independent contractor gets full control over pricing.

          --
          Technically, lunchtime is at any moment. It's just a wave function.
          • (Score: 2) by Runaway1956 on Saturday November 16 2019, @02:40AM (4 children)

            by Runaway1956 (2926) Subscriber Badge on Saturday November 16 2019, @02:40AM (#920858) Journal

            I think that's the key, edIII. As a contractor, I could always decide for myself exactly what to charge, for each and every job. That price is negotiated with the customer. If some third party decides for me what the price will be, then I'm no longer an independent contractor. I think that maybe Uber looked at the world of truck driving, saw how the corporates are taking advantage of people who want to own their own trucks, and tried to take advantage of all those loopholes. Government needs to take a look at how that whole can of worms works, and make some changes.

            As a contractor, the Uber driver who picks up a well heeled customer at LAX should be able to set his price based on his judgement that the potential customer can afford and is willing to pay ten dollars per mile. Or twenty, or fifty dollars per mile. As long as Uber is setting the price, he's not independent at all.

            • (Score: 1) by khallow on Saturday November 16 2019, @02:57AM (3 children)

              by khallow (3766) Subscriber Badge on Saturday November 16 2019, @02:57AM (#920863) Journal

              If some third party decides for me what the price will be

              Like a head hunter? In the case of Uber, the driver still has the power to reject what Uber offers.

              As a contractor, the Uber driver who picks up a well heeled customer at LAX should be able to set his price based on his judgement that the potential customer can afford and is willing to pay ten dollars per mile.

              Why?

              • (Score: 2) by Runaway1956 on Saturday November 16 2019, @03:12AM (2 children)

                by Runaway1956 (2926) Subscriber Badge on Saturday November 16 2019, @03:12AM (#920870) Journal

                the driver still has the power to reject what Uber offers.

                As employees, we all have the power to reject what the boss offers. The moment we lose that power, then we are no longer employees, but slaves. Perhaps you would like to try again with a real point?

                • (Score: 1) by khallow on Saturday November 16 2019, @04:20PM (1 child)

                  by khallow (3766) Subscriber Badge on Saturday November 16 2019, @04:20PM (#920992) Journal

                  As employees, we all have the power to reject what the boss offers.

                  Or contractors.

                  • (Score: 2) by Immerman on Sunday November 17 2019, @05:08PM

                    by Immerman (3985) on Sunday November 17 2019, @05:08PM (#921268)

                    Their point, I think, is that being able to reject the offer is not relevant to the discussion of whether you are a contractor or an employee.

          • (Score: 5, Interesting) by JoeMerchant on Saturday November 16 2019, @03:26AM (3 children)

            by JoeMerchant (3937) on Saturday November 16 2019, @03:26AM (#920874)

            To me, there needs to be a duck test:

            1) Does the "contractor" get the majority of their pay from a single payer, year after year? If so, that's not a contractor.

            2) Does the payer have a large number of "contractors" whose work is ongoing, no particular completion of a job just job after job after job after job? If so, those are not contractors.

            Employees can be part time, temporary, start on short notice and quit on short notice, day labor... Calling them people contractors as a way to reduce responsibility as an employer is disingenuous - whether employee or contractor, the needs of the laborer are the same - whatever labor laws have been written for employees should also be applied to contractors.

            You can split hairs about who pays the income tax - yes, that should only happen once per labor-payment event, where the insurance coverage comes from - whether employee or "contractor" the needs for insurance are the same, payment of overtime - as a part-time employee for two separate employers I was working 70+ hours some weeks without overtime pay, but in the end labor is labor regardless of how the paperwork is structured.

            --
            🌻🌻 [google.com]
            • (Score: 1, Informative) by Anonymous Coward on Saturday November 16 2019, @09:00AM

              by Anonymous Coward on Saturday November 16 2019, @09:00AM (#920933)

              Why yes, there should be a duck test. In fact, there is [irs.gov].

              1) Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
              2) Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
              3) Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?

              You can find more details on each at the IRS website, but on the surface, it seems like it's a pretty good test to me. I think the argument is that Uber passes/fails that duck test, depending on who is arguing what.

              Unless you are arguing that the current test is bad for some reason, in which case can you please elaborate on which component(s) of the current test are inappropriate and why?

            • (Score: 2) by edIII on Saturday November 16 2019, @11:11PM (1 child)

              by edIII (791) on Saturday November 16 2019, @11:11PM (#921102)

              1) Does the "contractor" get the majority of their pay from a single payer, year after year? If so, that's not a contractor.

              As long as you restrict that to the end user, or customer. Uber, when operating correctly, isn't a payer, but an intermediary between customer and contractor. No different than Stripe, Freshbooks, Quickbooks, any many other online platforms that handle customer interactions and payments. You wouldn't claim that somebody that accepted AMEX only is in fact an AMEX employee right?

              Which brings up another issue, there is also Lyft involved in this discussion. It's not any real difference to me if a allegedly independent contractor is being hosed by both Uber and Lyft at the same time. Many people have two jobs, so that test doesn't catch that.

              The test needs to concentrate on the levels of control over the transaction, who gets authority over invoicing, setting the price, .etc. I've been in the situation as an independent contractor where I had only one big client left, and I sure as heck didn't feel like an employee to them, nor did they see that relationship either (not that they knew how many clients I had). Especially since I set the price of my contract and they agreed.

              Not all independent contractors are being abused. Uber if operating correctly would actually be a pretty neat vendor for an independent driver to have.

              --
              Technically, lunchtime is at any moment. It's just a wave function.
              • (Score: 2) by JoeMerchant on Saturday November 16 2019, @11:36PM

                by JoeMerchant (3937) on Saturday November 16 2019, @11:36PM (#921114)

                who gets authority over invoicing, setting the price, .etc

                Very good points, and clearly distinctive - if you are representing products from a catalog, taking a fixed commission (as my wife did for several years), calling her an "independent consultant" is just insulting.

                --
                🌻🌻 [google.com]
      • (Score: 2) by JoeMerchant on Sunday November 17 2019, @02:21AM

        by JoeMerchant (3937) on Sunday November 17 2019, @02:21AM (#921148)

        I've done this gig - Company A payed Company B $11 per hour for employees. I was paid by Company B, $6 per hour. What did Company B do for me, above and beyond the $6 per hour? Nothing. They relieved Company A of some HR overhead, that's it.

        --
        🌻🌻 [google.com]
    • (Score: 1, Insightful) by Anonymous Coward on Friday November 15 2019, @11:17PM (1 child)

      by Anonymous Coward on Friday November 15 2019, @11:17PM (#920832)

      Nonsense. Was the last hooker you hired your employee? You hired her, you paid her...

      • (Score: 1, Touché) by Anonymous Coward on Saturday November 16 2019, @04:56AM

        by Anonymous Coward on Saturday November 16 2019, @04:56AM (#920893)

        Nonsense. The last hooker I hired is chained up in my basement. I kidnapped her and will get another one once I "fire" her...

    • (Score: 1) by khallow on Saturday November 16 2019, @02:54AM (6 children)

      by khallow (3766) Subscriber Badge on Saturday November 16 2019, @02:54AM (#920862) Journal
      The weird thing is that no actual abuse has been found. All this drama is about protecting various taxi cartels and acquiring more undeserved tax revenue.

      Further, the distinction between contractor and employee is a solved problem that can't be easily exploited by employers. There's a list [thebalancesmb.com] out there. Uber apparently has done their homework on that one. From the link:

      Behavioral Control

      If an employer trains and directs work, including hours of work, what tools or equipment to be used, specific tasks to be performed and how the work is to be done, the worker is likely an employee. If the worker can set his or her own hours and works with little or no direction or training, he or she is probably an independent contractor.

      Financial Control

      This factor includes how the worker is paid, whether the worker may work for others at the same time, and whether the worker can incur a profit or loss. A worker who is paid a salary is restricted from working for others, and who does not participate in company profits or losses, is probably an employee.

      Type of Relationship

      The presence of a specific contract may indicate an independent contractor, but this factor alone is not controlling. If the worker is entitled to benefits, this would indicate an employment relationship. Another factor would be the type of work the person does; if it is directly related to the company's core work, he or she is probably an employee. For example, a maintenance worker would not be doing 'company' work if he or she were working for a bank.

      So at a glance, the Uber contractor provides their own vehicle and decides to the minute what their working hours will be - starting and stopping at arbitrary times. So that fulfills the "Behavioral Control" criteria. They can work for competitors - there are examples of people working for both Uber and Lynx or a taxi driver adding work via one of the ride hailing services. As has already been noted, the driver can incur losses. Hence, the "Financial Control" criteria is satisfied. And lastly, Uber's business is matching ride hailing drivers with passengers (including the financial infrastructure of the resulting transaction) - not the driving itself. So the contracting driver (there is a contract, of course) is not the core business of Uber.

      Notice the key characteristics of an Uber driver: starts and stops working when they feel like it - not when Uber feels like it, provides own tools (particularly, a car and smart phone), can work for competitors, and does the driving while Uber merely does the matching. It's a bit innovative, but it's definitely contracting. Most other businesses can't provide all of that and hence, can't move their employees to contractor status. For example, my employer provides the equipment I use, mandates that I work particular hours, and I most certainly can't work for a competitor while I'm working for this company. The only real thing that would go towards contractor status is that my job isn't core to the company's business (it's a support job). That's not good enough with all these other contrary characteristics.

      • (Score: 0) by Anonymous Coward on Saturday November 16 2019, @03:28AM (1 child)

        by Anonymous Coward on Saturday November 16 2019, @03:28AM (#920875)

        can't move their employees to contractor status

        They were employees, but they got moved?

        • (Score: 1) by khallow on Saturday November 16 2019, @04:28PM

          by khallow (3766) Subscriber Badge on Saturday November 16 2019, @04:28PM (#920997) Journal
          Remember JoeMerchant's claim?

          but the whole "contractor" class is being used as giant loophole.

          There's no genuine loophole too big that the existing business world couldn't take advantage of it.

      • (Score: 1, Touché) by Anonymous Coward on Saturday November 16 2019, @04:23AM (1 child)

        by Anonymous Coward on Saturday November 16 2019, @04:23AM (#920882)

        The weird thing is that no actual abuse has been found.

        That's complete bullshit, and if you don't know that it's only because your head is up your ass.

        https://www.theguardian.com/technology/2019/apr/18/uber-lyft-drivers-surge-pricing-wages [theguardian.com]
        https://sanfrancisco.cbslocal.com/2017/05/24/uber-sued-for-allegedly-ripping-off-drivers-with-bait-and-switch/ [cbslocal.com]
        https://www.latimes.com/local/lanow/la-me-uber-drivers-lawsuit-20170429-story.html [latimes.com]

        Your misrepresentations and lies are so transparent and easily refuted, Khallow. Were you born this big an asshole, or do you have to work at it?

        • (Score: 0, Troll) by khallow on Saturday November 16 2019, @04:18PM

          by khallow (3766) Subscriber Badge on Saturday November 16 2019, @04:18PM (#920991) Journal
          Surge pricing is not abuse at all. The second two have nothing to do with employee versus contractor status. So yes, no actual abuse has been found.
      • (Score: 2) by edIII on Saturday November 16 2019, @11:19PM (1 child)

        by edIII (791) on Saturday November 16 2019, @11:19PM (#921107)

        You conveniently ignored that Uber AND Lyft drivers have no control over pricing. All independent contractors, that are not abused employees, have control over the prices of their products and/or services.

        The competitor thing is bullshit. I know people who work one shift at Burger King, and then another one at Carl's Jr. That kind of exclusivity is rarely found outside of salaried positions.

        the driver can incur losses.

        Yes they can. Especially when they can't simply raise prices to make themselves profitable.

        No. As long as Uber is dictating the pricing, the drivers are employees. Period. The moment the driver has the ability to bid for, or set pricing for services, Uber becomes a service provider, but not until then.

        --
        Technically, lunchtime is at any moment. It's just a wave function.
        • (Score: 1) by khallow on Sunday November 17 2019, @05:22AM

          by khallow (3766) Subscriber Badge on Sunday November 17 2019, @05:22AM (#921188) Journal

          You conveniently ignored that Uber AND Lyft drivers have no control over pricing.

          Sure, they do. They don't need to turn out.

          All independent contractors, that are not abused employees, have control over the prices of their products and/or services. [...] The moment the driver has the ability to bid for

          Which is the case here. The driver has the ability to bid for work. And they can just ignore work that's too low priced.

          The competitor thing is bullshit. I know people who work one shift at Burger King, and then another one at Carl's Jr. That kind of exclusivity is rarely found outside of salaried positions.

          And those people can get fired from one of those jobs, if they don't show up to work because they're working the other job instead.

  • (Score: 2, Insightful) by Anonymous Coward on Friday November 15 2019, @11:26PM (5 children)

    by Anonymous Coward on Friday November 15 2019, @11:26PM (#920833)

    So is New Jersey worried these uber drivers are going to collect disability they didn't know they were eligible for years ago? Or previous unemployment when they couldn't find any uber riders back in February?

    These might be "owed" in a legal sense, but its not like their absence caused a loss to the state - the people these payments were protecting were probably unable to protect.

    And if New Jersey does succeed and get a ruling in their favor, won't that open the gates for miss-classified employees to sue for denial of claims based on that miss-classifcation?

    • (Score: 3, Interesting) by barbara hudson on Friday November 15 2019, @11:43PM (4 children)

      by barbara hudson (6443) <barbara.Jane.hudson@icloud.com> on Friday November 15 2019, @11:43PM (#920834) Journal

      These might be "owed" in a legal sense

      That's all it takes. If you legally owe something, then you either pay or go bankrupt. In Uber's case, bankruptcy is inevitable, so why not just wind it up while investors can get some of their capital back?

      --
      SoylentNews is social media. Says so right in the slogan. Soylentnews is people, not tech.
      • (Score: 2) by edIII on Saturday November 16 2019, @02:39AM (2 children)

        by edIII (791) on Saturday November 16 2019, @02:39AM (#920857)

        They're screwed then. If New Jersey does get Uber to cough up that much money, what's going to happen everywhere else?

        A politicians point of view:

        1) popular legislation apparently
        2) pro-progressive pro-labor optics
        3) 650 fucking million dollars
        4) 650 fucking million dollars
        5) 650 fucking million dollars

        I predict that will be the new trend for states. Legalizing MJ and suing Uber :)

        --
        Technically, lunchtime is at any moment. It's just a wave function.
        • (Score: 2) by barbara hudson on Sunday November 17 2019, @12:27AM (1 child)

          by barbara hudson (6443) <barbara.Jane.hudson@icloud.com> on Sunday November 17 2019, @12:27AM (#921127) Journal
          Jobs driving for Uber are not worth preserving. You're better off flipping burgers for minimum wage. No wear and tear on your car, no extra insurance premiums for using your car as a commercial vehicle, not getting paid for waiting or driving around waiting for a call, not having to worry about getting hit for the employers share of taxes and benefits (unemployment, social security, etc) because you're classified as self-employed ...
          --
          SoylentNews is social media. Says so right in the slogan. Soylentnews is people, not tech.
          • (Score: 1) by khallow on Sunday November 17 2019, @05:26AM

            by khallow (3766) Subscriber Badge on Sunday November 17 2019, @05:26AM (#921191) Journal

            Jobs driving for Uber are not worth preserving.

            Yes, we didn't those jobs anyway.

            No wear and tear on your car, no extra insurance premiums for using your car as a commercial vehicle, not getting paid for waiting or driving around waiting for a call, not having to worry about getting hit for the employers share of taxes and benefits (unemployment, social security, etc) because you're classified as self-employed ...

            And no getting paid for providing a valuable service. You can break the economy a lot - if ride hailing gets destroyed, it's not that the straw that breaks the camel's back. But eventually, something will be that straw. Better to just not do such things in the first place so we have a less fragile economy.

      • (Score: 1) by khallow on Saturday November 16 2019, @04:26PM

        by khallow (3766) Subscriber Badge on Saturday November 16 2019, @04:26PM (#920996) Journal
        "If".
  • (Score: 1, Disagree) by Captival on Friday November 15 2019, @11:46PM (5 children)

    by Captival (6866) on Friday November 15 2019, @11:46PM (#920835)

    Hmmm, I'm a greedy entrenched city bureaucrat. If I arbitrarily declare A, I get 650 million dollars. If I declare B, I get nothing. What do you know!?!? It turned out to be A!

    • (Score: 0) by Anonymous Coward on Saturday November 16 2019, @12:47AM (4 children)

      by Anonymous Coward on Saturday November 16 2019, @12:47AM (#920843)

      You really are a greedy selfish bureaucrat, let me fix that for you:

      If I arbitrarily declare A, the state gets 650 million dollars. If I declare B, the state gets nothing.

      See, that money doesn't go to you, or at least its not supposed to, this is New Jersey ...

      • (Score: 0, Redundant) by khallow on Saturday November 16 2019, @03:04AM (2 children)

        by khallow (3766) Subscriber Badge on Saturday November 16 2019, @03:04AM (#920868) Journal

        or at least its not supposed to

        That's one way it can go wrong. There are examples (see here [soylentnews.org]) of private businesses find crime for a city and getting commissions on every fine they get through the courts. The people pushing this $650 million windfall through may see part of it, either directly or through some sort of bonus system.

        • (Score: 2) by barbara hudson on Sunday November 17 2019, @12:32AM (1 child)

          by barbara hudson (6443) <barbara.Jane.hudson@icloud.com> on Sunday November 17 2019, @12:32AM (#921129) Journal
          I'd be in favour of being able to give the city videos of people who don't pick up their dog shit in return for a cut of the fine. And I know most other dog owners feel the same way. Same as keeping your dog on a leash. Everyone would benefit - including the dogs who would not be at risk of getting hit by a car while running around off-leash.
          --
          SoylentNews is social media. Says so right in the slogan. Soylentnews is people, not tech.
          • (Score: 1) by khallow on Sunday November 17 2019, @05:11AM

            by khallow (3766) Subscriber Badge on Sunday November 17 2019, @05:11AM (#921184) Journal

            I'd be in favour of being able to give the city videos of people who don't pick up their dog shit in return for a cut of the fine.

            Are you in favor of doubling the fine? Asset forfeiture? I can assure you that if you create a market in such things, you'll get parties with a strong incentive to increase the punishments so they can increase the cut of the fines they receive.

      • (Score: 3, Insightful) by Captival on Sunday November 17 2019, @12:39AM

        by Captival (6866) on Sunday November 17 2019, @12:39AM (#921130)

        How naive do you really have to be to believe that? Having declared this, the politicians are now going to be paid visits by Uber's lobbying firm. They're going to be VERY generous with donating to their reelection campaigns. The politicians will also be getting visited by the taxicab unions and lobbies, who also will be gifting lots of support in the other direction. If the rule clears and the state does get the money, the labor department just made some big friends in powerful positions in state govt, and are going to be very well rewarded for it, usually through a big budget increase and lots more unelected appointees. But don't worry, they make the laws so it's all perfectly legal.

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