New Jersey has demanded that Uber pay $649 million for years of unpaid employment taxes for its drivers, arguing that the ride-hailing company has misclassified the workers as independent contractors and not as employees.

The state’s Department of Labor and Workforce Development issued the request this week to Uber and a subsidiary, Raiser, after an audit uncovered $530 million in back taxes that had not been paid for unemployment and disability insurance from 2014 to 2018.

Because of the nonpayment, the state is seeking another $119 million in interest.

The case represents a major escalation in how states nationwide view the employment practices at the core of many app-based companies, and the first time that a local government has sought back payroll taxes from Uber, which has hundreds of thousands of drivers in the United States.

A spokeswoman at Uber said the company disputed the state’s findings. “We are challenging this preliminary but incorrect determination, because drivers are independent contractors in New Jersey and elsewhere,” the spokeswoman, Alix Anfang, said.