Uber and Lyft are now required to pay Massachusetts drivers a minimum of $32.50 per hour and will be paying $175 million in a settlement to the state after a multi-year litigation.
The settlement comes after the companies were accused of violating Massachusetts wage and hour laws, according to a release by Attorney General Andrea Campbell’s office.
The settlement resolved the litigation and “puts a stop to the threat of the companies’ attempting to rewrite state employment law via a 2024 ballot initiative with would have resulted in drivers receiving inadequate protections and an earnings standard that would not guarantee minimum wage,” the release said.
The agreement reached on Thursday, June 27, mandates that the $32.50 per hour that Uber and Lyft drivers receive to be adjusting annually for inflation, guarantee drivers paid and sick leave, health insurance benefits and paid family and medical leave.
Of the $175 million, Uber is ordered to pay $148 million and Lyft is to pay $27 million, with a majority of the funds distributed to current and former drivers, the attorney general’s office said.
The agreement also mandates drivers are eligible for work related accident insurance up to $1 million in coverage for work-related injuries.
Other terms in the agreement include the companies’ requirement to provide drivers with information about the length and earnings of a trip before drivers complete it, provide drivers with in-app chat support with a live person and provide divers with information about why they no longer allowed to drive with the ability to appeal that decision.
Both companies are required to complete an annual audit and provide information to show they have complied with the terms of the settlement to the attorney general’s office.
“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,” Governor Maura Healey said in a release.
Attorney General Andrea Campbell said the agreement holds the companies accountable while guaranteeing Massachusetts employees minimum pay, paid sick leave, work-related accident insurance and health care stipends.
“For years, these companies have underpaid their drivers and denied them basic benefits,” Campbell said. “… 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.”
Terms and information about the agreement can be found here.
