Uber and Lyft settled a yearslong authorized dispute with the lawyer basic in Massachusetts on Thursday, agreeing to pay their drivers within the state a minimal fee with some advantages.
As a part of the settlement, Uber and Lyft pays $175 million to resolve claims that the businesses violated state labor legal guidelines, with many of the cash to be distributed to gig employees, state officers mentioned in a press release. But in a win for the ride-hailing firms, drivers will proceed to be labeled as impartial contractors and never workers.
Among the advantages that the state received for its gig employees have been a medical health insurance plan for drivers working at the very least 15 hours every week, expanded accident insurance coverage and a minimal pay fee of $32.50 per hour for time spent on a experience.
The settlement adopted comparable pay and profit provisions enacted in New York, California, Washington State and most just lately Minnesota. Uber and Lyft have spent tens of thousands and thousands of {dollars} on native authorities lobbying in opposition to efforts by employees and labor teams to extend driver pay.
“For years, these companies have underpaid their drivers and denied them basic benefits,” mentioned Andrea Joy Campbell, the lawyer basic of Massachusetts. “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.”
The lawsuit in opposition to Uber and Lyft was first filed in 2020 by Maura Healey, the earlier lawyer basic.
In separate statements, Uber and Lyft mentioned that the settlement was a win for his or her drivers, and that sustaining impartial contractor standing was necessary for flexibility.
“This agreement is an example of what independent, flexible work with dignity should look like in the 21st century,” Tony West, Uber’s chief authorized officer, mentioned in a press release.
“We’re thrilled to reach an agreement that works for everyone, and builds on similar progress we’ve made in states like New York, California, Minnesota and Washington,” mentioned Jeremy Bird, Lyft’s govt vice chairman of driver expertise.
As a results of the settlement, each firms will keep away from a possible Massachusetts poll initiative battle over driver classification in November.