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The Taxman Cometh for (and Killeth?) the Gig Economy

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The Taxman Cometh for (and Killeth?) the Gig Economy



An interesting tax battle underway in New Jersey, highlighted by Toni Sutton-Deangelico on this site yesterday, has the potential to completely upend the still nascent Gig economy. And it appears to be happening without what many would consider due process for the targeted company.

The Gig economy, powered with brash new technologies and most often represented in discussions of rideshare provider Uber, is at its core free and unfettered capitalism. Technology companies facilitate the partnering of people in need of a service with those who have the capacity to provide it. That’s it.

Or is it?

Everyone knows that there have been challenges brought regarding the employment status of Gig workers. Uber and Lyft have been sued by drivers who voluntarily entered into agreements to provide transportation services, and then decided that they should be considered employees. Unions and taxi services have also been engaged in these court challenges. The Dynamex decision in California, which was codified by the legislature with the passage of AB5, dramatically reforms the way independent contractors are defined. Gig economy companies are girding for a battle over that new law. But at least in California there was a defining court decision and a legislative process in place to redefine what an independent contractor is. In New Jersey, that is seemingly being done by regulatory fiat.

As reported by Sutton-Deangelico:

The New Jersey Department of Labor and Workforce Development (NJDOL) alleges that the rideshare company Uber has been wrongfully classifying its drivers as independent contractors and is demanding that the company pay $649 million for years of unpaid employment taxes for its drivers. The department has sent letters to Uber’s subsidiary Raiser, saying it must pay $523 million in taxes that are past-due over the last four years, in addition to $119 million in interest and penalties on all monies owed.

It should be noted that this move is occurring without any precedent setting court case or legislative decree. It is an agency determining on its own that these workers are not being properly classified. It is a move most likely being watched closely by other states – particularly those with significant budget concerns.

New Jersey just happens to be one of the high tax northeastern states reeling from the flight of some of its wealthiest residents. In 2016, Billionaire David Tepper moved his entire company out of state, declaring low-tax Florida as his new home. The tax revenue generated from his income alone was so significant that legislative budget forecaster Frank Haines warned Tepper’s move to Florida could generate “revenue uncertainty” for New Jersey government. At the time, the State Treasurer reported that “the top 100 filers pay over 5.5 percent of all [gross income tax] payments” that the state receives. Tax reforms instituted under the Trump administration have only exacerbated the revenue problems for New Jersey and neighboring high-tax states.

One has to wonder if the aggressive move on the Gig economy is more of an effort to stem the loss and recover needed revenue. In other words, this action could be intended far more for the benefit of the state than the workers they claim to be protecting.

We certainly understand in the workers’ compensation industry that the burgeoning Gig economy is creating potentially millions of unprotected workers. Those injured while working on these “gigs” risk becoming dependent on the taxpayer since no safety net is in place for them. We recognize that something needs to be done; but trying to classify them all as traditional employees as we understand the category today simply won’t work.

It will instead just kill the Gig economy. We need more innovative solutions.

While the Gig economy now touches dozens if not hundreds of sectors in our economy, transportation is by far the most visible. Road warriors will tell you that companies such as Uber and Lyft have had a profound impact on travel, vastly improving options and service received when “on demand” transportation is needed. Part of that convenience is provided by the “on demand” nature of the business arrangements between the applicable parties. It is not a perfect system, but simply redefining the relationship and applying retroactive taxes is not a solution. Especially when the underlying argument to do so is weak.

New Jersey Labor Commissioner Robert Asaro-Angelo said in a statement that “When independent contractors file for unemployment or disability insurance, their benefits are paid by taxpayers because their employer didn’t contribute.” It is a fair concern regarding disability coverage, but personally I have never heard of an independent contractor applying for, much less receiving, unemployment benefits. I would be very curious to know how much the state has paid to “unemployed’ Gig workers. In the absence of solid statistics, that argument seems like a stretch.

A stretch that justifies the seizure of capital under the guise of legitimate taxation.

Ultimately this represents yet another battle for Gig economy companies. I suspect it won’t be the last. If the state is successful others will follow, and you will see a dramatic change in the way these companies do business, and a severe reduction in the services they provide. In other words, road warriors, prepare to see those dirty cabs with unfriendly drivers once again…..



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Robert Wilson is President & CEO of WorkersCompensation.com, and “From Bob’s Cluttered Desk” comes his (often incoherent) thoughts, ramblings, observations and rants – often on workers’ comp or employment issues, but occasionally not.

Bob has a couple unique personality characteristics. He firmly believes that everyone has the right to his (Bob’s) opinion, and while he may not always be right, he is never in doubt. Enter at your own risk, and like all of our blog areas, we encourage you to read the disclaimer at the bottom of the page.

We’re not responsible for this guy…..

Bob is an accomplished speaker for the workers’ compensation industry. He is available for conferences, corporate events, children’s birthday parties and Bar Mitzvahs. You may access his Speakers Brief here.

Join Bob and almost 20,000 employers and professionals on his LinkedIn group – the Workers Compensation Roundtable. Join here today!

Follow Bob on Twitter at his personal account @WorkCompKing



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Novartis reshuffles its wild cards; Tough sell for Biogen? Googling proteins; Ken Frazier’s new gig; and more – Endpoints News

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Always remember just how risky it is to gamble big on small studies.

A little more than 4 years ago, Novartis reportedly put up a package worth up to $1 billion for the dry eye drug ECF843 after a small biotech called Lubris put it through its paces in a tiny study of 40 moderate to severe patients, tracking some statistically significant markers of efficacy.

By last fall, the program had risen up to become one of CEO Vas Narasimhan’s top “wild card” programs in line for a potential breakthrough year in 2021. These drugs were all considered high-risk, high-reward efforts. And in this case, risk won.

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Global Gig Economy and Sharing Economy Market 2021 Growth Factors | Strategic Analysis | Increasing Demand With Top Key Players

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Gig Economy and Sharing Economy

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DZS Debuts Latest Innovations including Cloud Analytics Demo and XCelerate by DZS 10 Gig Combo Access Solutions at Fiber Connect 2021

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DZS Cloud Service Management Intelligence demonstration combines advanced connected premises and network operations analytics supported by an open, cloud native architecture

PLANO, Texas, July 23, 2021 (GLOBE NEWSWIRE) — DZS (NASDAQ: DZSI), a global leader in optical and packet-based mobile transport, broadband connectivity and software defined networking solutions, today announced plans to demonstrate its latest innovations at Fiber Connect 2021 Conference & Exhibition, taking place July 25-28, 2021 in Nashville, Tennessee. Visitors to DZS booth #215 will be able to see and interact with DZS hardware and software solutions from across the company’s technology pillars – Orchestration and Analytics, Mobile Transport, Broadband Connectivity, and Edge Access. Highlights include live demonstrations of DZS Cloud Service Management Intelligence, a first glimpse of the company’s big data analytics system with a cloud native architecture that monitors and provides advanced quality-of-service and issue resolution insights into the connected home correlated with access and aggregation networks. A full array of the recently announced DZS XCelerate line of 10 gig-class fiber access cards and systems will also be on display. The DZS Velocity, DZS Chronos, DZS Helix, and DZS Cloud solutions portfolios continue to expand, and the company is proud to be able share its innovations on the Fiber Connect 2021 Expo show floor.

In addition to the live product displays and demonstrations taking place at the DZS booth, Eric Wulfsberg, Senior Director, Product Line Management, Edge Access at DZS, will be presenting in person on Sunday July 25 at 3 pm at the Broadband Forum BASe Future of Fiber Technologies Workshop. As a Silver Sponsor of Fiber Connect 2021, DZS CMO Geoff Burke will be the featured speaker on Monday July 26 at 5:30 pm in the Expo Theater for a 20-minute presentation entitled “XCelerating into the Future with DZS”.

“Fiber Connect is a leading optical fiber business and technology event in the Americas that strategically convenes North American service providers, fiber overbuilders and WISPs to develop the communications industry of tomorrow,” said Andrew Bender, CTO of DZS. “We believe next generation broadband connectivity, mobile and edge transport, and software defined solutions and services are top-of-mind among the Fiber Connect audience; this aligns perfectly with where we as DZS have been focusing our innovation and development energy on a go-forward basis. Since Fiber Connect 2021 marks one of the first U.S. national shows in the communications industry to be back in-person since the COVID-19 pandemic changed the world, we are looking forward to meeting with and demonstrating our latest innovations for our customers, prospective customers and ecosystem partners in-person in Nashville.”

Visitors to the DZS booth will experience first-hand a range of the latest technology innovations:

  • DZS Cloud Analytics: At the center of the DZS booth, demonstrations of the new DZS Cloud analytics and orchestration solutions will show how service providers can optimize and automate their access and edge networks, reducing operational complexity to achieve cost-effective scale. DZS market-leading network orchestration and software automation solutions are gaining traction with service providers around the world and driving transformation to a software defined and automated network in an open and multi-vendor environment. DZS Cloud includes orchestration, access network management and advanced analytics, enabling service providers to efficiently operate their networks and detect issues proactively to avoid service impact.

  • Mobile Transport: The DZS Chronos mobile transport portfolio provides a full range of 5G-ready xHaul (fronthaul, midhaul and backhaul) solutions that are open, software-defined and proven and enable topologies and architectures for Open RAN and Virtual RAN approaches. The new O-series line of environmentally hardened optical transport products will be on display, including the MPX-9103 100G DWDM Muxponder and the modular TMS-1190 Optical Edge Transport Platform, optimized for high capacity and long-reach mobile xHaul scenarios. Also, on display will be the widely deployed C1216RO Open FrontHaul Gateway as well as M-series mobile backhaul products, including M3500 and M1500 cell-site switch / router platforms.

  • Broadband Access: The DZS Velocity Portfolio of broadband access systems, switches and routers, unified by the powerful Software Defined Network (SDN)-enabled operating system sdNOS, provides carriers with extraordinary flexibility with the latest fiber access technologies and software-centric operational models. DZS V-series modular chassis system, as well as new specialized compact form factor XGS-PON and 10 gig access solutions will be shown – all of which are part of the groundbreaking XCelerate by DZS line of 10 Gig solutions.

  • Connected Premises: The DZS Helix Edge Access solutions portfolio of feature-rich ONTs, smart gateways and home Wi-Fi management solutions for residences and enterprises will be on display, ready for emerging 5G, 10 gigabit, Wi-Fi 6-enabled networks. Armed with these intelligent access edge solutions complemented by DZS Cloud, service providers can move beyond traditional triple-play offerings to quickly and efficiently launch, operate, troubleshoot and optimized cutting edge residential and business services.

See you at the show! For more information visit www.DZSi.com.

About DZS
DZS Inc. (NSDQ: DZSI) is a global leader of intelligent, packet-based mobile transport and broadband access converged edge solutions with more than 20 million products in-service with customers and alliance partners spanning more than 100 countries.

DZS, the DZS logo, and all DZS product names are trademarks of DZS Inc. Other brand and product names are trademarks of their respective holders. Specifications, products, and/or product names are all subject to change.

This press release contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Private Securities Litigation Reform Act of 1995. These statements reflect the beliefs and assumptions of the Company’s management as of the date hereof. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would,” variations of such words, and similar expressions are intended to identify forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. The Company’s actual results could differ materially and adversely from those expressed in or contemplated by the forward-looking statements. Factors that could cause actual results to differ include, but are not limited to, those risk factors contained in the Company’s SEC filings available at www.sec.gov, including without limitation, the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q and subsequent filings. In addition, additional or unforeseen affects from the COVID-19 pandemic and the global economic climate may give rise to or amplify many of these risks. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. DZS undertakes no obligation to update or revise any forward-looking statements for any reason.

For further information see: www.DZSi.com.
DZS on Twitter: https://twitter.com/dzs_innovation
DZS on LinkedIn: https://www.linkedin.com/company/DZSi/

Press Inquiries:
McKenzie Hurst, Thatcher+Co.
Mobile: +1 408.888.6787
Email: mhurst@thatcherandco.com



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