Rideshare drivers in Massachusetts will soon receive company-provided benefits, as well as a minimum wage of $32.50 per hour, starting August 15. That’s thanks to a new settlement between the state and rideshare companies Uber and Lyft, four years after Attorney General Andrea Campbell sued the companies, claiming their drivers should be considered employees under state law.
The two companies also agreed to pay a combined $175 million, the majority of which will be paid to “current and former drivers who were underpaid by the companies,” Campbell’s office announced yesterday. The office said it would release details about who qualifies and how to apply “in the coming weeks.” Despite the settlement and the original nature of the lawsuit, drivers will still be considered independent contractors.
Still, drivers in the state will receive annual pay increases based on inflation and other employee benefits, such as the ability to earn up to 40 hours of sick leave per year, paid at $20 per hour. Uber and Lyft will also give drivers stipends so they can buy health care and sign up for the state’s family and medical leave program, as well as cover work-related injuries.
To ensure they comply with the agreement, the companies must conduct annual audits and file reports with the attorney general’s office. According to the published settlement, penalties for violations could include “any applicable restitution, fines, and penalties.”