Attorney General Andrea Joy Campbell announced that her Office has secured a historic settlement in its case against Uber and Lyft that requires a minimum pay standard of $32.50 per hour and a suite of benefits and protections for drivers. Uber and Lyft will also pay a combined total of $175 million to the state to resolve allegations that the companies violated Massachusetts wage and hour laws, a substantial majority of which will be distributed to current and former drivers.
The settlement resolves the Office’s multi-year litigation against Uber and Lyft and puts a stop to the threat of the companies’ attempting to rewrite state employment law via a 2024 ballot initiative which would have resulted in drivers receiving inadequate protections and an earnings standard that would not guarantee minimum wage.
“For years, these companies have underpaid their drivers and denied them basic benefits. Today’s agreement holds Uber and Lyft accountable, and provides their drivers, for the very first time in Massachusetts, guaranteed minimum pay, paid sick leave, occupational accident insurance, and health care stipends,” said AG Campbell. “I want to thank my team, whose hard work has secured a standard of dignity for every driver across the state, and our labor allies and the drivers themselves for the tireless work and advocacy.”
“Our lawsuit against Uber and Lyft was always about fairness for drivers. I congratulate Attorney General Campbell and her team for securing this settlement that delivers historic wages and benefits to right the wrongs of the past and ensure drivers are paid fairly going forward,” said Governor Maura Healey.
“Thanks to Attorney General Campbell, Uber and Lyft’s free ride is over. This settlement includes a comprehensive package of strong wages, benefits and protections for the drivers that these corporations have been exploiting for years. We deeply appreciate AG Campbell’s hard work holding these corporations rightfully accountable to Massachusetts employment laws,” said Massachusetts AFL-CIO President Chrissy Lynch.
Today’s agreement mandates the following:
- Drivers receive a minimum of $32.50 per hour for time spent traveling to pick up riders and transporting them to their destination, adjusted annually for inflation, ensuring for the first time that the tens of thousands of Uber and Lyft drivers in Massachusetts will be guaranteed minimum pay.
- Uber pay $148 million, and Lyft pay $27 million for a combined $175 million, most of which will be distributed as restitution to current and former drivers who were underpaid by the companies. More information about who qualifies for these payments and how to file a claim will be publicly announced by the Attorney General’s Office in the coming weeks.
- Drivers receive guaranteed paid sick leave, earning one hour of sick pay for every 30 hours worked, up to a maximum of 40 hours per year. As part of the agreement, Uber and Lyft must update their driver applications so drivers are able to view and claim their sick leave directly in the app.
- Drivers receive a paid stipend to buy into the state’s paid family and medical leave program.
- Pooled health insurance benefit. For the first time anywhere, Uber and Lyft will allow drivers to pool their hours driving for the two companies to obtain access to a health insurance stipend. Anyone who drives for more than 15 hours per week—for either or both companies—will be able to earn a health insurance stipend to pay for a plan on the Massachusetts Health Connector.
- Drivers are eligible for occupational accident insurance paid by the companies for up to $1 million in coverage for work-related injuries.
Additionally, provisions in the agreement dictate that the companies:
- Provide drivers with information about the length of a trip, the destination, and the expected earnings before they are expected to accept a ride.
- Provide drivers with detailed pay information about their earnings and how much a rider has paid once a trip is completed.
- Cannot discriminate against drivers based on race, religion, national origin, sex, sexual orientation, gender identity, disability or other protected characteristic.
- Cannot retaliate against drivers who have or are perceived to have filed a complaint about the companies with the Attorney General’s Office or sought payment or other benefits under today’s settlement.
- Must offer drivers in-app chat support with a live person in English, Spanish, Portuguese, and French.
- Must perform an annual audit and provide detailed information about compliance with the terms of the settlement agreement to the Attorney General’s Office.
- Must provide drivers with information about why they have been deactivated and create an appeals process that allows drivers to challenge the deactivation.
- Must provide the Attorney General’s Office with the information it needs to ensure compliance.
The agreement also details a process to address any violations by either company, including a process for the companies to address any driver complaints to the Attorney General’s Office, and enforcement by a court if the companies don’t comply.
A copy of the agreement can be found, here.