Major Class Action Wage and Hour Settlement: Ridesharing Drivers in New York Get More than $320 Million in Back Pay
According to a report from Central Coast Public Radio, the nation’s major ridesharing companies—Uber and Lyft—will pay $328 million in back wages to drivers in New York State. The settlement resolves allegations that Uber and Lyft improperly took sales tax out of driver payments when that cost should have been billed directly to passengers. In this article, our New York City employee rights attorneys provide a more detailed overview of the case.
The Settlement: Ridesharing Companies Will Pay Back Wages to New York State Drivers
Uber and Lyft have agreed to pay $328 million to settle allegations of underpaying their drivers in New York. It is the single largest wage theft case in the history of New York State. An investigation by the Attorney General’s Office revealed that these companies were deducting sales tax and other fees from drivers’ paychecks. However, under state law, these costs should have been billed directly to passengers. This settlement will compensate up to 100,000 drivers in New York.
Beyond that, Uber and Lyft have also committed to providing sick leave and setting a minimum wage of $26 per hour for driving time in New York. While this agreement currently applies only in New York, it may serve as a template for other states to pursue similar wage theft cases against ride-sharing companies. There is currently a case preceding against Uber and Lyft in New Jersey.
Ridesharing Drivers are Independent Contractors in New York
While they are recovering significant back wages in this case, it is important to note that ridesharing drivers are still generally classified as independent contractors in New York. It is a classification status that means that they are not considered employees of the rideshare companies and, as such, do not receive the same benefits and protections that are typically afforded to employees.
That is not to say that ridesharing drivers in New York are without labor rights. Notably, the new settlement between the New York Attorney General and Uber/Lyft includes an increased “earning floor” and a paid sick leave requirement. The earnings floor is akin to a minimum wage for ridesharing drivers in the state. Under the settlements, any driver who works for Uber or Lyft will get a minimum of one hour of paid sick leave for every thirty hours worked—up to a maximum benefit of 56 hours per year.
Contact Our New York City Employment Law Attorney Today
At Poulos LoPiccolo PC, our New York employment lawyer has the skills to take on the full range of employee rights cases. Our firm holds big companies accountable for wage and hour violations. If you have any questions about seeking back pay for a wage violation, we can help. Call us now or contact us online for your completely confidential case evaluation. From our Manhattan law office, we provide employment law representation all across New York.