In a historic village, Uber Technologies Inc. . (NYSE:) has agreed to settle its unemployment insurance obligations with the New York State Department of Labor (NYSDOL), marking the first resolution of its kind in the United States. The agreement, announced by Governor Kathy Hochul, mandates Uber to make future quarterly contributions to the state’s Unemployment Insurance Trust Fund and retroactive payments dating back to 2013.
Despite ongoing disputes over the employment status of Uber drivers and couriers, with Uber considering its drivers independent contractors and NYSDOL classifying them as employees, it was agreed that Uber would contribute to the fund on behalf of these workers. The controversial issue of classifying Uber drivers as employees or independent contractors remains unresolved, but through this agreement, Uber concedes that eligible drivers should receive unemployment benefits.
The company’s senior vice president and general counsel, Tony West, expressed support for the deal. He stressed that this would guarantee driver autonomy while providing the necessary protections.
The settlement is seen as a testament to New York’s commitment to workers’ rights and fair wages. However, due to legal restrictions on the disclosure of unemployment insurance data, the total financial value of the settlement remains confidential.
In addition to this development, Uber and its competitor Lyft (NASDAQ:) reached a settlement with New York Attorney General Letitia James. The two ride-hailing companies will pay a total of $328 million – $290 million from Uber and $38 million from Lyft – to settle claims that they systematically defrauded drivers by depriving them of legitimate income and benefits. This decision further highlights the changing environment for gig economy workers in New York State.
This unprecedented settlement makes New York the first U.S. state to settle past and future unemployment insurance liability claims against Uber. It not only ensures the independence and flexibility of drivers, but also ensures their access to crucial protections.
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