Lyft Pays $19.4 Million in Driver Misclassification Case, Says NJ Department of Labor

Driver behind the wheel on a busy road, representing issues related to Uber accident claim liability in New Jersey

How drivers are classified is often one of the biggest points of contention in rideshare cases, with popular companies like Lyft and Uber classifying their drivers as independent contractors rather than employees. However, a recent state audit required Lyft to pay over $19.4 million to the New Jersey Department of Labor and Workforce Development’s state funds, after it was discovered that they misclassified over 100,000 workers.

This case is noteworthy. While it centers on wage and tax issues, it also raises important questions about how rideshare platforms like Lyft and Uber will handle driver accountability, liability, and insurance coverage in crashes moving forward. For drivers, passengers, and victims, this audit potentially marks a significant turning point in how future personal injury claims against these corporate giants will be handled in the Garden State.

Audit Reveals Over $19.4 Million in Failed Contributions

In September 2025, the NJDOL announced that Lyft had agreed to pay $19,435, 087.06 after an audit revealed that they had misclassified more than 100,000 drivers as independent contractors between the years of 2014-2017.

The audit began when Lyft drivers applied for unemployment and disability benefits, only to later find out that the company had failed to make any contributions to the state’s mandatory funds. Because of this misclassification, Lyft drivers were deprived of necessary protections, including unemployment, temporary disability, family leave, and workers’ compensation.

Unsurprisingly, Lyft contested the audit’s findings. However, in August 2025 (and right before their first hearing with the New Jersey’s Office of Administrative Law), they withdrew their challenge. Though they had already paid $10.8 million to avoid further interest, Lyft paid the remaining $8.5 million in interest and penalties following the withdrawal request.

New Jersey Attorney General, Matthew J. Platkin spoke out about the outcome, stating, “We will not allow businesses to exploit workers by misclassifying them, stripping employees of essential benefits and avoiding their responsibility to support programs that protect our workers.”

Why This Outcome Matters for Future Uber Accident Claims in New Jersey

Lyft’s repayment to the state of New Jersey has implications that reach far beyond this particular case. Here’s how:

Changes to Company Accountability

As it stands, Uber and Lyft’s decision to classify their drivers as independent contractors is a tactical move meant to shield them from liability when one of their passengers gets injured. However, if regulators continue to challenge these companies about how they classify their drivers, it could lead to greater responsibility for their driver’s actions. If so, this could make it significantly easier for injured passengers to collect the compensation they need from Uber, rather than the driver’s personal insurance policy.

Evidence and Access to Data May Improve

While rideshare companies keep internal records, they don’t keep them for long, often prompting lawyers to send a spoliation letter asking them to preserve evidence as a case continues.

However, if New Jersey continues to push for greater accountability from these companies, they may also request that they maintain clearer records, as well. Evidence of trip data, safety details, and driver activity are crucial for establishing fault in an Uber accident lawsuit. This could be a game changer for your claim.

Call Drazin and Warshaw For Help With Your Uber Accident Claim

Time will tell how this case continues to reshape the rideshare industry, but it’s a step in the right direction. If you were injured in an Uber accident, don’t face the aftermath alone. Justin Drazin, the founder of UberHurtMe.com will thoroughly investigate the details of your case and go up against the rideshare company. Whether he’s fighting Lyft oewhjnr Uber, Attorney Drazin is here to advocate for your rights.

Call 732-333-8141 today or fill out the online contact form to schedule a free consultation. He represents clients throughout New Jersey, including Red Bank, Westfield, and Newark.

Disclaimer: This blog is intended for informational purposes only and does not establish an attorney-client relationship. It should not be considered as legal advice. For personalized legal assistance, please consult our team directly.