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Thursday, November 14, 2019

Uber Technologies Inc. owes New Jersey about $650 million in unemployment and disability insurance taxes because the rideshare company has been misclassifying drivers as independent contractors, the state's labor department said.

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Democrats hate the gig economy, free lancers and independent contractors. They need to come under the heel of the state. One of these days they will require baby-sitters and kids with lemonade stands to join a union.

#1 | Posted by nullifidian at 2019-11-14 06:49 PM | Reply

Democrats hate the gig economy, free lancers and independent contractors. They need to come under the heel of the state. One of these days they will require baby-sitters and kids with lemonade stands to join a union.

#1 | POSTED BY NULLIFIDIAN AT 2019-11-14 06:49 PM

Republicans love freeloaders, scammers, grifters and cheats. There are rules for taxi services that everyone else has to follow. You can't redefine your business and pretend you have no accountability

#2 | Posted by hatter5183 at 2019-11-14 07:00 PM | Reply

I live in NJ. I remember when the state had a AAA bond rating in the 1950s. The sales tax came first. Then the income tax. As tax revenue increased, spending increased faster.

You can be sure Uber drivers won't see that money.

#3 | Posted by Ray at 2019-11-14 07:04 PM | Reply

There are rules for taxi services that everyone else has to follow.

It's a good bet that the taxi industry had a direct hand in making those rules.

They obviously don't like competition.

#4 | Posted by Ray at 2019-11-14 07:09 PM | Reply

"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. Drivers who moonlight for the companies to supplement income from other jobs are additionally required to report rideshare earnings for eligibility determination purposes as a result of the state's determination that they are employees."

If they are, in fact, W-2 employees eligible for unemployment benefits then Uber is in the wrong.

#5 | Posted by eberly at 2019-11-14 07:48 PM | Reply

"Democrats hate the gig economy, free lancers and independent contractors."

Republicans hate Unions. Independent contractors, by law, cannon Unionize.

#6 | Posted by Danforth at 2019-11-14 08:04 PM | Reply

"Democrats hate the gig economy, free lancers and independent contractors."

Nah, just folks who treat their employees like independent contractors to make OTHER taxpayers foot the bill.

#7 | Posted by Danforth at 2019-11-14 08:05 PM | Reply

#5 - Uber employees are 1099, not W-2.

#8 | Posted by hoser at 2019-11-14 09:25 PM | Reply

"Uber employees are 1099, not W-2."

By definition, employees receive W-2s, where payroll taxes are withheld, and possibly federal, state, and local taxes. When no taxes of ANY kind are withheld, it's referred to as self-employed income, 1099 income, or business income. Cash also is in this category. 1099s are required to be issued when the payment is $600 or more in a calendar year.

But "employees" are most definitely NOT "1099".

#9 | Posted by Danforth at 2019-11-14 09:37 PM | Reply

Too bad Christie isn't still Governor, Uber could just gridlock his capital city to send a message. And it probably wouldn't even be illegal!

#10 | Posted by snoofy at 2019-11-14 09:57 PM | Reply

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"Democrats hate the gig economy, free lancers and independent contractors."

Not when it's a teaching gig at Harvard!

Your broad brushing shows the hallmarks of an eighth grade education, so I can understand why you didn't think of that one. It's literally far above your pay grade.

#11 | Posted by snoofy at 2019-11-14 09:59 PM | Reply

"If they are, in fact, W-2 employees eligible for unemployment benefits then Uber is in the wrong."

This actually brings up a fascinating tax issue:

The IRS has a ~20 question test to determine if the worker is an employee or an independent contractor, questions like Do you set the worker's hours? Is the relationship continuous and ongoing? and Do you have direct control over their work? The IRS stresses no one question makes the determination, rather the overall picture.

There is also what I snarkishly refer to as "Question 21", a safe harbor regulation which basically says the owner can't be individually disadvantaged if treating employees as independent contractors is standard practice in your industry, in your area. The threshold is either 20% or 25%. The rule is there so the IRS won't close down a business, by forcing one owner to do what none of his competition must. There are other rules, too: you have to spell out the relationship in a pre-hire contract, and you must issue a 1099 if required.

When I learned of this during an IRS intensive in 2011, I made a bee-line to the teacher after the class and said, "Safe harbor sounds like if enough people around you are breaking the law, you can too!" The teacher leaned in to me and said That's EXACTLY what it means.

Uber may win: The workers set the hours, choose to take fares or not, have no uniform or behavior rules other than basic decency, and Uber fulfilled the 1099 requirements. Of course, if YOU make more than 20%-25% of the workers in your industry, in your area, I sure hope safe harbor doesn't apply.

#12 | Posted by Danforth at 2019-11-14 10:02 PM | Reply

12

I run into this issue all the time with employers hiring uninsured subs to perform work for them.

#13 | Posted by eberly at 2019-11-14 10:17 PM | Reply

This problem largely goes away with national health care.

#14 | Posted by snoofy at 2019-11-14 10:19 PM | Reply

This problem largely goes away with national health care.
#14 | POSTED BY SNOOFY

You're entitled to your fantasy.
Every health care reform made matters worse. National health care won't be any different.
Once you pay up front. Then the system has to cut services to control spending.

#15 | Posted by Ray at 2019-11-14 10:40 PM | Reply

"Every health care reform made matters worse."

France on line #1 for you.

#16 | Posted by Danforth at 2019-11-14 10:49 PM | Reply

"I run into this issue all the time with employers hiring uninsured subs to perform work for them."

What kind of work are they doing?

#17 | Posted by Danforth at 2019-11-14 10:53 PM | Reply

"Every health care reform made matters worse."

Every blanket statement you make is more wrong than right.

#18 | Posted by snoofy at 2019-11-14 11:01 PM | Reply

France on line #1 for you.
#16 | POSTED BY DANFORTH

France? That country is going bankrupt.

#19 | Posted by Ray at 2019-11-14 11:05 PM | Reply

Every blanket statement you make is more wrong than right.
#18 | POSTED BY SNOOFY

When I was a kid, doctors would come to our house and my father paid with cash.

Today, the medical system is bankrupting families. Costs are way way beyond reason.

BTW, I haven't had health insurance for over thirty years.

#20 | Posted by Ray at 2019-11-14 11:09 PM | Reply

"When I was a kid, doctors would come to our house and my father paid with cash."

Yeah, the milkman came to your house too.

Today, the medical system is bankrupting families. Costs are way way beyond reason.

Beyond reason? How much is reasonable to pay if your child is sick, what's the point where you just let the child die?

Well, how much Ray?

#21 | Posted by snoofy at 2019-11-14 11:14 PM | Reply

""Every health care reform made matters worse."

Ray makes stupid statements like than and still expects us to take him seriously. Ridiculous nonsense. Obamacare has saved peoples live you idiot.
It's one thing to be an idiot it is quite another to advertise it and be proud of it.

#22 | Posted by danni at 2019-11-15 07:27 AM | Reply

#9 - Thanks for clarifying. I should have written that Uber drivers are 1099.

#23 | Posted by hoser at 2019-11-15 09:24 AM | Reply

"Today, the medical system is bankrupting families. Costs are way way beyond reason."

Hospitals used to be non-profits, today they are for profit. Health insurers reap huge profits as do pharmaceutical companies. Ray thinks he likes it that way because he hasn't had severe illness yet, apparently. When he does, or when someone he cares about does and they are faced with bankruptcy his idiotic ideas will change. Til then he will just run his mouth about how horrible "socialism" is though people in countries with "socialist" healthcare have zero bankruptcies due to healthcare.

#24 | Posted by danni at 2019-11-15 09:39 AM | Reply

"What kind of work are they doing?"

In some cases it's a general contractor who hires some carpenters or roofers that aren't employees but they also don't have any general liability insurance nor work comp.

In other cases, it may be a business that hires someone to paint or mow or some other chore and they don't want to employ them....they are a 1099 rather than W-2.

This causes issues with insurance companies who hate when their insureds hire such folks. These uninsured folks can get hurt, cause property damage, etc...and they have no insurance. That means their liability falls to the company that hires them.....but they don't like paying premium for it.

And in some cases.....it's inappropriate to call a 1099 worker a non-employee. It doesn't pass the smell test with the particular state.

I don't know how New Jersey addresses this but if it's anything like Kansas.....Uber may be in the wrong here. These 1099 workers.....let's ask them some questions....

1. do they work for anybody else?
2. do they enjoy a come and go relationship with Uber. Meaning..they don't "report" to them.
3. Do they have their own benefits, commercial insurance, submit 941s to the state for their unemployment insurance
4. Is this a temporary status?

All of those questions can be asked...but if the answers are the way I suspect they'll be.....then the state doesn't really recognize those workers as 1099.

#25 | Posted by eberly at 2019-11-15 09:57 AM | Reply

"But if the answers are the way I suspect they'll be.....then the state doesn't really recognize those workers as 1099."

Really? Because if 1, 2, and 4 are yes, and 3 is no, I'd be ruling 1099 from the other side of the table.

"it's inappropriate to call a 1099 worker a non-employee. It doesn't pass the smell test with the particular state."

We might be confusing nomenclature. 1099 workers ARE non-employees, by definition. If I were deciding, my main questions would be "Does the hirer have direct control over the worker's work product?" and "Can the worker choose when and how they do the work?" For me, controlling work hours and work would be the determining factors.

#26 | Posted by Danforth at 2019-11-15 10:04 AM | Reply

A company my son worked for some years ago called all their workers contractors and they all got 1099s at the end of the year. My son contacted the IRS about it and they did exactly nothing even though all the employees were expected to report for work at the same time every day, their work was somewhat dangerous, etc. Some of those employees ended up owing $20-30,000 in taxes, my son owed $5,000 which it took him several years to pay off.
When you read about the IRS budget being reduced realize that means they will cease enforcing the laws on employers, auditing rich people, etc.

#27 | Posted by danni at 2019-11-15 10:09 AM | Reply

"When you read about the IRS budget being reduced realize that means they will cease enforcing the laws on employers, auditing rich people, etc."

In real dollars, the IRS has less money to work with than they did a decade ago, while population has grown, and the IRS has been burdened with thousands of tax law changes. Recently, testimony was given that should send shivers into every taxpayer:

According to Vox, Americans owe a cumulative $131 billion in unpaid taxes, enough to completely fund the Department of Education for two years. The bulk of that money is owed by the wealthiest people in the country, yet the IRS isn't attempting to collect it from them. Instead, as IRS Commissioner Charles Rettig confirmed in a letter to Congress recently, the agency literally can't afford to audit the rich, so it's pursuing the poor instead.
www.gq.com

#28 | Posted by Danforth at 2019-11-15 10:14 AM | Reply

26

I just threw those out off the cuff....I don't disagree with you.

This better explains it....

www.strictlybusinesslawblog.com

27

Danni, classic example of how those workers were inappropriately classified as 1099.

but your son called the wrong place, IMO. He should have called the state's department of labor & state treasury. That's who the employer was really shorting more so than the IRS.

Uber is trying to minimize their unemployment taxes, employer share of FICA, employee benefits, and work comp.

#29 | Posted by eberly at 2019-11-15 10:20 AM | Reply

Well, either the drivers get penalized by not getting the benefits or the customers get penalized by having to pay higher prices. Even though the customers are the much bigger group, sometimes they don't understand that by companies not paying these benefits just to save money, they are eventually paying for it in taxes to support the social programs. There just isn't any easy answer. You operate the right way, you have to charge higher prices and risk losing customers. This has been an obstacle for every business for hundreds of years.

I know there are those in a fantasy world who think money comes from nowhere and that you can increase operating expenses and not product/service prices but that's not how reality works, so if you are one of those people then please, move to the middle of a forest and stay off grid.

#30 | Posted by humtake at 2019-11-15 12:37 PM | Reply

"You operate the right way, you have to charge higher prices and risk losing customers."

Call me crazy, but if you can't run a businesses honestly and still make a profit...you can't run a business.

#31 | Posted by Danforth at 2019-11-15 12:41 PM | Reply

"I know there are those in a fantasy world who think money comes from nowhere"

No you don't.

#32 | Posted by Danforth at 2019-11-15 12:41 PM | Reply

BTW, I haven't had health insurance for over thirty years.

#20 | POSTED BY RAY AT 2019-11-14 11:09 PM | REPLY |

Yet you will get the same treatment at a hospital as people who do and when you declare bancruptcy and don't pay the hospital will recoup the loss by charging the people who Do have insurance $7 for a tylenol to cover YOUR FREELOADING

#33 | Posted by hatter5183 at 2019-11-15 01:06 PM | Reply

Don't worry about Ray.

He's discovered that anytime he's sick all he has to do is shove gold up his -------- and he feels better the next day.

Gold, it cures everything.

#34 | Posted by ClownShack at 2019-11-15 01:15 PM | Reply

1. do they work for anybody else?

Uber drivers can work for anyone else. Many Uber drivers will simply clock in to both Uber and Lyft at the same time. When they get a ride from one, they clock out of the other, then clock back in once the ride is done. Some even add delivery services to what they clock into simultaneously and take what comes first.

2. do they enjoy a come and go relationship with Uber.

Uber drivers literally use their app to clock in and out at will. Want to clock in and do one ride then clock out for several weeks? Nothing preventing it. There is no schedule. The driver decides when and if to clock in and out.

Drivers do not report to anyone.


3. Do they have their own benefits, commercial insurance, submit 941s to the state for their unemployment insurance

Uber provides commercial auto insurance when a driver is clocked in. But there are no employee benefits since they are not employees.

4. Is this a temporary status?

I suppose it can be, seeing as a driver decides when and if to drive.

#35 | Posted by Idependant97 at 2019-11-15 06:35 PM | Reply

As the 1099 receiver, I pay my self employment taxes on myself and I make payments four times a year because there is no taxes withheld.

My family business taught me this.

The problem with whether you are an employer or not is an employer problem. As an employee, I am responsible for my own taxes.

#36 | Posted by Petrous at 2019-11-16 11:06 AM | Reply

"As the 1099 receiver, I pay my self employment taxes on myself and I make payments four times a year because there is no taxes withheld."

Do you also have a W-2 job? If so, my usual advice to clients is have extra taken out at that job, to cover your quarterlies. The bride and I have $400 taken out from each of her paychecks to help cover MY self-employment taxes, and I never have to pay quarterly.

BTW...that's treasury.gov site you linked to on the other thread didn't prove what you claimed, at all. Just the opposite, in fact.

#37 | Posted by Danforth at 2019-11-16 11:17 AM | Reply

Um, I dont remember providing a link...someone else did?

#38 | Posted by Petrous at 2019-11-16 05:45 PM | Reply

Eberly, self employed people dont pay unemployment taxes. If you dont have work as self employed, there is no umenployment. Actually, I had trouble with unemployment money when I told them I am self employed part of the year (I am a pro soccer ref). If you're self employed, you ARE working. That pissed me off as I dont do games in summer and winter...none are played outdoors.

#39 | Posted by Petrous at 2019-11-16 05:49 PM | Reply

Oh, I was laid off from my wage job, but my self employment caused issues

#40 | Posted by Petrous at 2019-11-16 05:50 PM | Reply

"There just isn't any easy answer. You operate the right way, you have to charge higher prices and risk losing customers. This has been an obstacle
for every business for hundreds of years."

Or you could operate efficiently but with less profit. Profit is not sacred. Those who pretend it is are not helping anyone except for the greed f*****s.

#41 | Posted by danni at 2019-11-17 12:09 PM | Reply

I am a pro soccer ref

Awesome!

#42 | Posted by AndreaMackris at 2019-11-17 12:14 PM | Reply

Oh, I was laid off from my wage job, but my self employment caused issues
#40 | POSTED BY PETROUS

This is true of most bureaucracies, public and private; if you are out of the "happy path" your SOL.

#43 | Posted by AndreaMackris at 2019-11-17 12:15 PM | Reply

Uber isn't expecting to make a profit intil year 2021.

www.chicagotribune.com

Right now, Uber is losing over a billion dollars per quarter.

www.forbes.com

#44 | Posted by Idependant97 at 2019-11-17 06:15 PM | Reply

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