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‘They’ll be obligated to compensate over 100,000 drivers, provide minimum rates, and offer paid sick leave as part of the settlement.’
Uber and Lyft have settled with the New York attorney general’s office, agreeing to pay a total of $328 million following an investigation into wage theft. The investigation found that the companies had systematically cheated their drivers out of hundreds of millions of dollars in pay and benefits. Both Uber and Lyft will now have to compensate more than 100,000 current and former drivers in New York and provide minimum hourly pay rates and paid sick leave.
Under the settlement, Uber will pay $290 million, while Lyft will pay $38 million. The attorney general’s office discovered that both companies had deducted sales taxes from drivers’ commissions between 2014 and 2017, which should have been paid by riders. Additionally, neither company offered paid sick leave. As a result, drivers outside of New York City will now be guaranteed a minimum earnings floor of $26 per hour, with one hour of sick pay for every 30 hours worked, capped at 56 hours per year.
New York City drivers will receive $17 per hour for sick leave, while drivers outside of the city will receive $26 per hour. Both rates will be adjusted annually for inflation. Drivers can submit a claim for their share of the settlement on the New York Attorney General’s website. The companies will also be required to update their apps to improve the process for requesting sick leave and provide support for pay-related inquiries, as well as detailed earnings statements for drivers.
These settlements come as New York has been cracking down on app-based service providers in response to the Biden administration’s push to classify gig workers as employees. While a California court recently ruled in favor of companies being able to classify their drivers as contractors, New York has made progress in securing more protections for workers. In September, Uber, GrubHub, and DoorDash were ordered to pay their delivery workers a minimum wage.