California Labor Commissioner's Office announces record-setting $272.5 million settlement with Lyft over driver misclassification claims
California Labor Commissioner's Office announces record-setting $272.5 million settlement with Lyft over driver misclassification claims
SACRAMENTO — The California Labor Commissioner's Office (LCO), along with state and local enforcement partners, announced the largest wage-and-hour settlement in California history. Under the agreement, Lyft, Inc. will pay $272.5 million, plus any accrued interest, to resolve allegations that it misclassified California drivers as independent contractors, denying them wage and workplace protections required under state law. Of the total settlement, 87% will go directly to drivers.
What California Labor Commissioner Lilia García-Brower said: “This settlement is about the workers who came forward and spoke up. Their voices made this outcome possible. We pursued this case to ensure workplace protections have real meaning and to recover as much as possible for drivers. My office will forgo its share of the settlement so that every available dollar goes directly to drivers who filed wage claims. I'm grateful to the courageous workers who came forward to assert their rights and to the dedicated advocates who stood with them throughout the process.”
In recognition of their decision to come forward, more than 1,600 drivers who filed wage claims through LCO's administrative process will receive additional funds as a result of the LCO redirecting its share of the penalties ($5.45 million) payable to the state. Additionally, wage claimants will receive a multiplier that doubles the mileage used to calculate their payment.
The LCO filed a lawsuit against Lyft in Alameda County Superior Court in August 2020. The lawsuit alleged that Lyft treated drivers as independent contractors rather than as employees as required under state law at the time. As a result, the LCO alleged that drivers were denied minimum wages and overtime, rest-break premiums, reimbursement for business expenses, accurate wage statements, timely wage payments, paid sick leave and other protections.
The lawsuit became part of a coordinated proceeding with an enforcement action brought by the California Attorney General and the City Attorneys of Los Angeles, San Diego and San Francisco, along with private actions filed under California's Private Attorneys General Act. The cases were coordinated in San Francisco Superior Court in September 2021.
Rideshare Drivers United helped bring drivers' concerns to the LCO and assisted drivers in filing wage claims against Lyft through 2020.
The settlement addresses alleged violations from April 6, 2016, through December 15, 2020. California voters approved Proposition 22 in November 2020, establishing a separate classification framework for app-based drivers who meet specified criteria. Because that framework took effect after the period covered by this case, the settlement does not require Lyft to reclassify drivers going forward or provide relief for later work.
The restitution amount will be placed into a fund managed by a third-party settlement administrator. Eligible individuals will be contacted directly by the settlement administrator. The settlement administrator will establish a website, email address, and call center to inform and answer questions from drivers who believe they are eligible for restitution. More details about these resources will be available in the near future.
