Lyft to Pay $272.5 Million in California Wage-Theft Settlement

Lyft will pay $272.5 million to settle a California wage-and-hour lawsuit, which is the largest such settlement in the state's history. The settlement addresses allegations that Lyft misclassified its workers as independent contractors from 2016 to 2020, denying them wage and workplace protections required under state law at that time. Eighty-seven percent of the total settlement will go directly to drivers. California Supreme Court upheld Proposition 22, allowing Uber, Lyft, and other gig economy companies to classify their drivers as independent contractors. Lyft stated, "We believe drivers have always been properly classified under the law, and we’re glad to put this case behind us. We remain laser focused on helping create more earnings for drivers and more affordable rides for riders." In 2020, California passed Proposition 22, which permits Lyft and Uber drivers to be classified as contractors. The California Labor Commissioner’s Office filed suit in 2020 in Alameda County Superior Court, alleging that Lyft failed to provide its workers with minimum wages, overtime, rest-break premiums, reimbursement for business expenses, accurate wage statements, timely wage payments, and sick leave. The lawsuit became part of a coordinated proceeding with actions from the California attorney general and the city attorneys of Los Angeles, San Diego, and San Francisco, coordinated in San Francisco Superior Court in September 2021. A union representing Uber and Lyft drivers in California was certified by regulators after gathering tens of thousands of signatures in support. California Labor Commissioner Lilia García-Brower stated, "This settlement is about the workers who came forward and spoke up. We pursued this case to ensure workplace protections have real meaning and to recover as much as possible for drivers." The settlement follows the recent certification of the California Gig Workers Union, which secured collective bargaining power for drivers. Assembly Bill 1340 passed last year, granting gig ride-hailing drivers the right to unionize and collectively bargain. The California Public Employment Relations Board officially recognized the union in September after it secured support from 30% of active drivers in the state in August.