Uber vs. New Jersey – level 3
The US state of New Jersey says that Uber owes the labor department around $650 million in unemployment and disability insurance because Uber said that its drivers are independent contractors.
The labor department sent Uber letters that said that the company owes money for the past four years, and it will need to pay additional money, as a result.
The situation may force Uber to make its drivers employees instead of independent contractors. This means that they would get higher pay according to state laws, which would increase costs per driver by over 20%.
An Uber spokesperson said that the company is going to fight the labor department, and it could take years to finish this fight.
Difficult words: labor department (a part of the government that deals with work), unemployment and disability insurance (the money that a US company should pay to protect workers if they lose their jobs or if they get hurt), independent contractor (a worker who works for a company based on a contract).
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