Uber and Lyft agree to provide minimum wage to Massachusetts drivers
The agreement, which includes a $175 million settlement with the state, keeps the drivers classified as independent contractors, not employees.
Uber and Lyft on Thursday settled a yearlong legal dispute with the Massachusetts attorney general, agreeing to pay their drivers in the state a minimum rate with certain benefits .
As part of the settlement, Uber and Lyft will pay $175 million to resolve allegations that the companies violated state labor laws, the most of the money to be distributed to gig workers, state officials said in a statement. But in a victory for ride-hailing companies, drivers will continue to be classified as independent contractors, not employees.
Among the benefits the state has obtained for its gig workers. there was a health insurance plan for drivers working at least 15 hours per week, expanded accident insurance, and a minimum wage rate of $32.50 per hour for time spent on a route.
The settlement follows similar pay and benefit provisions adopted in New York, California, Washington State and, more recently, the Minnesota. Uber and Lyft have spent tens of millions of dollars lobbying local governments against efforts by workers and union groups to raise driver wages.
“For years, these companies have underpaid their drivers and denied them basic benefits,” said Massachusetts Attorney General Andrea Joy Campbell. “Today’s agreement holds Uber and Lyft accountable and provides their drivers, for the first time ever in Massachusetts, with a guaranteed minimum wage, paid sick leave, workers’ compensation insurance and benefits for health care."
The lawsuit against Uber and Lyft was first filed in 2020 by Maura Healey, the former attorney general.
In separate statements, Uber and Lyft said the settlement was a victory for their drivers, and that maintaining independent contractor status was important for flexibility.
“This agreement is an example of what independent, flexible and dignified work should look like. in the 21st century," Tony West, Uber's chief legal officer, said in a statement.
"We're excited to reach an agreement that works for everyone and that builds on similar progress we've made in states like New York, California, Minnesota and Washington,” said Jeremy Bird, Lyft's executive vice president of driver experience.
As a result of the agreement, the two companies will avoid a potential election battle in Massachusetts over driver classification in November.
The agreement, which includes a $175 million settlement with the state, keeps the drivers classified as independent contractors, not employees.
Uber and Lyft on Thursday settled a yearlong legal dispute with the Massachusetts attorney general, agreeing to pay their drivers in the state a minimum rate with certain benefits .
As part of the settlement, Uber and Lyft will pay $175 million to resolve allegations that the companies violated state labor laws, the most of the money to be distributed to gig workers, state officials said in a statement. But in a victory for ride-hailing companies, drivers will continue to be classified as independent contractors, not employees.
Among the benefits the state has obtained for its gig workers. there was a health insurance plan for drivers working at least 15 hours per week, expanded accident insurance, and a minimum wage rate of $32.50 per hour for time spent on a route.
The settlement follows similar pay and benefit provisions adopted in New York, California, Washington State and, more recently, the Minnesota. Uber and Lyft have spent tens of millions of dollars lobbying local governments against efforts by workers and union groups to raise driver wages.
“For years, these companies have underpaid their drivers and denied them basic benefits,” said Massachusetts Attorney General Andrea Joy Campbell. “Today’s agreement holds Uber and Lyft accountable and provides their drivers, for the first time ever in Massachusetts, with a guaranteed minimum wage, paid sick leave, workers’ compensation insurance and benefits for health care."
The lawsuit against Uber and Lyft was first filed in 2020 by Maura Healey, the former attorney general.
In separate statements, Uber and Lyft said the settlement was a victory for their drivers, and that maintaining independent contractor status was important for flexibility.
“This agreement is an example of what independent, flexible and dignified work should look like. in the 21st century," Tony West, Uber's chief legal officer, said in a statement.
"We're excited to reach an agreement that works for everyone and that builds on similar progress we've made in states like New York, California, Minnesota and Washington,” said Jeremy Bird, Lyft's executive vice president of driver experience.
As a result of the agreement, the two companies will avoid a potential election battle in Massachusetts over driver classification in November.
What's Your Reaction?
