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Uber Technologies Inc. has agreed to pay $77,925 to Alaska's workers compensation fund after the state workers comp division accused the ride-sharing company of misclassifying its drivers as independent contractors, the state labor department said.
San Francisco-based Uber also will stop operating in Alaska unless the company classifies its drivers as employees and complies with Alaska's workers comp, unemployment and tax laws, the labor department said Thursday in a statement.
Uber admitted no wrongdoing in the settlement agreement, according to an Alaska Dispatch report.
“Misclassifying employees allows companies like Uber to avoid paying unemployment insurance, taxes and workers compensation premiums,” the statement reads. “The Uber settlement is part of a broader state and federal effort to reduce worker misclassification fraud.”
Uber's settlement will be paid to the Alaska Workers' Compensation Benefit Guaranty Fund, which covers injured workers when their employers fail to provide comp coverage, according to the statement.
California Uber drivers were granted class action status earlier this week in a federal court case over whether they should be considered employees or independent contractors.
Court filings say the California lawsuit class could include more than 160,000 drivers, but Uber said in a statement Tuesday that it believes fewer than 15,000 California drivers would qualify for class status in that case.
Alaska is considering a pair of bills that would exempt ride-sharing services such as Uber Technologies Inc. and Lyft Inc. from providing workers compensation coverage to drivers in their networks.