In a landmark settlement, Uber Technologies Inc . (NYSE:UBER) has agreed to address its unemployment insurance liabilities with the New York State Department of Labor (NYSDOL), marking the first such resolution in the U.S. 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's drivers and couriers, with Uber seeing its drivers as independent contractors and NYSDOL classifying them as employees, it has been agreed that Uber will contribute to the fund on behalf of these workers. The contentious issue of classifying Uber drivers as employees or independent contractors persists unresolved, but through this agreement, Uber concedes that eligible drivers should receive unemployment benefits.
The company's Senior Vice President & Chief Legal Officer, Tony West, expressed support for the agreement. He emphasized that it would ensure driver autonomy while providing 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 revealing unemployment insurance data, the total financial value of the settlement remains undisclosed.
In addition to this development, Uber and its competitor Lyft (NASDAQ:LYFT) have reached an agreement with New York Attorney General Letitia James. The two ride-hailing companies will pay a combined $328 million — $290 million from Uber and $38 million from Lyft — to settle claims of systematically cheating drivers out of rightful earnings and benefits. This move further underscores the changing environment for gig economy workers in New York State.
This groundbreaking agreement makes New York the first U.S. state to settle past and future unemployment insurance liability claims against Uber. It safeguards not only drivers' independence and flexibility but also ensures their access to crucial protections.
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