Uber to pay state $78K for misclassifying drivers

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Uber, the taxi-like ridesharing service, has agreed to pay the state $77,925 because they misclassified drivers as independent contractors instead of employees.

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The company operated in Anchorage for six months then pulled out in March because Uber could not come to an agreement with the municipality to legally operate in the city. The muni said the company was violating the taxi ordinance. Now, the company is also prohibited from operating in the state until they comply with the state’s classification laws.

According to a statement from the Department of Labor and Workforce Development, labeling workers as contractors lets companies avoid paying unemployment insurance, taxes, and worker compensation premiums. It also violates the Alaska Workers’ Compensation Act. The money will go toward covering uninsured injured workers claims.

Similar lawsuits have been brought against the company throughout the country.