Home / Business and Economy / Lyft Settles Driver Misclassification Lawsuit for $272.5M
Lyft Settles Driver Misclassification Lawsuit for $272.5M
2 Oct
Summary
- Lyft will pay $272.5 million to settle a lawsuit over driver classification.
- The lawsuit alleged drivers were denied minimum wage and overtime pay.
- The settlement covers violations from April 2016 to December 2020.
Lyft has reached a significant settlement of $272.5 million to address a lawsuit that accused the company of misclassifying its drivers as independent contractors, thereby violating California law. This agreement, pending judicial approval, seeks to conclude a legal dispute that began with a lawsuit filed by the California Labor Commissioner's Office in August 2020.
The core of the lawsuit was the allegation that Lyft denied drivers crucial benefits such as minimum wage and overtime pay, along with other protections afforded to employees. The period in question for these alleged violations spans from April 6, 2016, to December 15, 2020.
This settlement closes a chapter for Lyft, though other companies in the gig economy, like Uber, continue to face similar legal challenges. The legal landscape for gig workers in California has been complex, with the passage of Proposition 22 in 2020 establishing a carve-out from Assembly Bill 5, which had sought to reclassify many gig workers as employees.
