January 2024 NCSEA CSQ

compliance with the clarified new hire reporting requirements that now
clearly applied to their 1099 independent contractor drivers. The OAG-
CSD’s Employment Services team began meeting with Lyft weekly to work
out logistical issues related to new hire reporting and income withholding
for their drivers. These weekly meetings continued for six months, well past
the law’s effective date.
Some of the issues addressed during the OAG-CSD’s collaboration with
Lyft were:
• Data/file transfer protocols for the state’s employer portal;
• Changes to the portal to create a new identification code for
independent contractors; and
• Instruction on how to properly respond electronically to National
Medical Support Notices that might now be generated to Lyft for
some of their drivers by the state’s automated child support system.
Lyft also made internal processing changes to
reroute IWOs for their drivers from their Payroll
Department to their Accounts Payable
Department since that department pays the
drivers. The OAG-CSD then worked with Lyft’s
Accounts Payable team, which lacked experience processing IWOs, by
providing instruction on properly calculating withholding amounts from
drivers’ periodic earnings, which optionally can be paid to some drivers as
often as daily, including addressing the maximum withholding limits.
Once the law took effect, the impact of both the legislative change and the
OAG-CSD’s collaboration with Lyft was readily apparent. Comparing
numbers for state fiscal year (SFY) 2022 (the year following the effective
date of the legislative change) to the prior year, in SFY 2021:
• IWOs to Lyft increased from 119 per year to almost 10,000 per year
(the monthly average increased from 10 to 828);
• Total yearly collections from Lyft increased from $227,000 to almost
$9.2 million (averaging over $765,000 per month); and
• Total cases paying from Lyft increased from an average of 37 per
month to almost 1,500 per month.