Lyft pays $19.4 million to New Jersey over driver classification dispute
Lyft has agreed to pay $19.4 million to New Jersey after state officials concluded the company misclassified more than 100,000 drivers as independent contractors between 2014 and 2017. The payment follows an audit by the state’s Department of Labor and Workforce Development, which found Lyft failed to make required contributions to unemployment, disability, and family leave funds.
The audit assessed Lyft $10.8 million in unpaid contributions plus $8.5 million in penalties and interest. Lyft initially contested the findings but later withdrew its request for a hearing, paying the balance to settle the matter. The company said it still believes it classified drivers properly under state law but chose not to pursue further legal challenges.
New Jersey Attorney General Matthew Platkin and Labor Commissioner Robert Asaro-Angelo said the misclassification deprived workers of critical protections. “There is no reason temporary or on-demand workers … can’t be treated like other employees,” Asaro-Angelo emphasized.
The case reflects a broader trend of scrutiny on gig economy companies. Lyft previously reached a $27 million settlement with Massachusetts in June 2024, and both Lyft and Uber continue to face regulatory battles over whether drivers should be treated as employees entitled to benefits such as minimum wage, overtime, and sick leave.