Magic Leap sued by ex-employee: Allegedly classifying formal workers as contract workers to avoid tax

According to Bloomberg News, US augmented reality startup Magic Leap was sued by former employees and the company was accused of classifying hundreds of employees as independent contractors to avoid paying nearly $36 million (about 230 million yuan) in payroll taxes.

Kimberly Couto, former contract worker for Magic Leap, stated that she had complained to the company’s management and lawyers at the meeting last November. But the next day, she was fired.

Magic Leap received over 2.3 billion U.S. dollars (about 14.5 billion U.S. dollars) in funding from companies such as Alphabet and Alibaba. Although the company has not yet launched a product, it plans to launch a virtual reality glasses later this year.

At the same time, the company has been involved in various lawsuits with its employees. Another employee sued the company last year, saying that the company abused female employees, but later the suit settled.

Last month, Magic Leap sued an employee, claiming that he threatened to extort the company through age-discriminatory lawsuits.

In the first two days of the trial proceedings, Magic Leap announced the completion of a new round of financing of US$461 million, which was financed mainly by Saudi Arabia’s sovereign wealth fund.

In the lawsuit, Katu claims that Magic Leap often finds talented employees of other technology companies to dig up headhunters and then introduces them into the company as contractors to circumvent non-competition agreements.

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