Gig companies avoid reclassifying their workforces by settling, rather than resolving, claims regarding the status of gig workers
In New Jersey, a recent multimillion dollar payout was made by Uber to settle allegations that the company misclassified its drivers and failed to pay necessary unemployment insurance taxes. This reflects a trend in which gig companies like Uber, Lyft, and Grubhub have settled claims over the past decade and avoided questions of legally re-classifying gig workers as "employees." Having employee status would provide gig workers with greater workplace benefits and legal protections under the NLRA. However, it is very challenging for plaintiffs to win these cases because these gig worker claims are often forced into arbitration by companies. Despite these difficulties, cases are still being brought in states such as California and Massachusetts to attempt to resolve the classification issue regarding gig workers.
See "Gig companies avoid reclassifying their workforces by settling, rather than resolving, claims regarding the status of gig workers", Chris Marr, Bloomberg Law, September 20, 2022