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New Jersey in Battle With Lyft Over Classification of Drivers


According to a report from the New Jersey Monitor, state regulators are in a dispute with Lyft over allegations that the ridesharing company improperly misclassified its drivers. Notably, The New York Times reports that the state settled a similar lawsuit with Lyft’s top competitor Uber in 2022 for approximately $100 million. Within this article, our New Jersey employment law attorney discusses the key issues in this case.

Background: Understanding Employee Classification

 Worker classification matters. In general, the people doing services for a business will either be classified as an employee or an independent contractor. From the perspective of workers, the distinction makes a big difference because classification is tied directly to certain workplace rights—including eligibility for employment benefits and coverage for many employment laws. In recent years, federal and state lawmakers have started tightening regulations for who can be classified as an independent contractor instead of an employee.

An Overview of New Jersey’s Legal Challenge Against Lyft 

New Jersey is taking legal action against Lyft for allegedly misclassifying its drivers as independent contractors. Notably, state regulators argue that the misclassification has resulted in the company underpaying state taxes by approximately $17 million. The dispute centers on employment taxes related to unemployment, temporary disability benefits, and family leave funds. New Jersey officials believe that many Lyft drivers have been improperly misclassified as independent contractors.

Where the Case Fits In Over the Broader Context of Worker Classification 

The litigation against Lyft is part of a larger state and national conversation about the gig economy and its impact on worker rights. After taking office, President Joe Biden introduced stricter workplace regulations that were designed to make it more difficult for companies like Uber and Lyft to classify workers as independent contractors. Still, the ridesharing companies maintain that their operational model supports flexibility and independence for their drivers.

What to Do If You Believe You Have Been Misclassified as an Independent Contractor 

If you believe you have been improperly misclassified as an independent contractor, it is important that you take proactive steps to protect your rights and your interests. You may have been unfairly denied key workplace benefits. Here are three things to do next:

  1. Understanding the law. Make sure you know the difference between an employee and an independent contractor.
  2. Document your relationship with the employer. Make sure you record details regarding your work environment, including the control the employer exercised over you.
  3. Consult with an experienced New Jersey employment law attorney. Your lawyer can review the case and take action to help you get justice for any misclassification that occurred.

Contact Our New Jersey Employment Attorney Today

At Poulos LoPiccolo PC, we are committed to providing top-tier legal representation to employees. If you have any questions about worker classification, we are here to help. A misclassified worker may be entitled to financial compensation. Contact us today for a completely confidential, no obligation initial case review. We provide representation to employees throughout all of New Jersey.



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