Lyft Pays $19M To New Jersey After Audit Involving Drivers

Lyft has paid New Jersey more than $19 million after it misclassified more than 100,000 drivers as independent contractors, state officials say – a charge that the company continues to deny.

On Thursday, the New Jersey Department of Labor and Office of Attorney General announced that the rideshare company has submitted $19,435,087 in payments to the state in connection with an audit performed from 2014 to 2017.

According to the agencies, an audit was triggered when Lyft drivers filed for unemployment insurance (UI) and disability benefits, revealing the company had not made contributions to the state funds on their behalf.

Here’s why misclassifying workers is a problem, according to state authorities:

“When a worker is misclassified as an independent contractor, they lose rights which they are entitled to as employees, including minimum wage, overtime pay, workers’ compensation coverage, unemployment insurance, earned sick leave, family leave and other benefits. As independent contractors, workers are not protected by workplace safety laws, equal pay protections and a host of other employment-related rights. Employers who misclassify workers avoid making mandatory contributions to the UI Trust Fund, leaving every other employer in the state to pay for their delinquency.”

Lyft initially paid the more than $10.8 million assessed for contributions to stop the running of interest, while continuing to contest the department’s assessment.

In August 2025 – a few days before the first hearing date – Lyft withdrew its request for a hearing and paid the remaining balance owed of $8,540,937 for penalties and interest.

“Although many allege that being an employee stifles flexibility, this couldn’t be further from the truth,” New Jersey Labor Commissioner Robert Asaro-Angelo said.

“There is no reason temporary or on-demand workers who work flexible hours, or even minutes at a time, can’t be treated like other employees,” Asaro-Angelo added.

Patch reached out to Lyft for comment about the state’s announcement and received the following reply:

“We continue to believe drivers are properly classified as independent contractors under New Jersey law, something drivers on Lyft say they overwhelmingly support as it provides them the freedom and flexibility they value most. While we disagree with the NJDOL's findings, we will not be pursuing further challenges to the assessment.”

According to officials, the $19.4 million from Lyft has been disbursed to the state’s unemployment, temporary disability, family leave insurance trust funds and workforce development funds.

• See Related: Uber, Lyft Drivers Rally In New Jersey For Better Pay And Benefits
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