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Lyft to Pay $272.5 Million in California Driver Wage Theft Settlement
Confirmed
In Short: Lyft will pay $272.5 million to settle California driver wage theft claims, the largest settlement of its kind in the state's history.
California sued Lyft in 2021, accusing the company of misclassifying drivers to avoid costs and obligations associated with employee status.
The settlement, which still requires court approval, covers drivers who worked for Lyft from April 2016 through December 15, 2020.
California Attorney General Rob Bonta said thousands of drivers will be eligible for lost wages and benefits during the period when they would have been considered employees under California labor law.
The settlement includes $237,075,000 reserved for drivers who worked for Lyft, with about 87% of the total going directly to drivers.
Bonta alleged that Lyft misclassified drivers as independent contractors rather than employees, violating California Labor Code sections and the state’s Unfair Competition Law.
Lyft maintained that it had complied with the law and disputed the underlying allegations, but said it was glad to put the case behind it.
The settlement also includes $5.45 million in penalties that otherwise could have gone to the state.
A website, email address, and call center will be set up to inform and answer questions from drivers who believe they are eligible for restitution.
The case was brought by the state along with Los Angeles, San Francisco, and San Diego, and was later consolidated with lawsuits filed on behalf of thousands of Lyft drivers.
Lyft and Uber have faced similar disputes outside California over whether drivers should be treated as employees or independent contractors.
The California Supreme Court upheld Proposition 22 in 2024, preserving the classification framework for qualifying app-based drivers.
Bonta noted that rideshare companies like Lyft have enjoyed massive growth and profits on the backs of drivers, many of whom are from immigrant communities and communities of color.
What this adds
The settlement is the largest wage-theft settlement in California's history.
The case highlights ongoing legal challenges faced by gig economy companies over worker classification.
What's confirmed
- California sued Lyft in 2021, accusing the company of misclassifying drivers to avoid costs and obligations associated with employee status.
- The settlement, which still requires court approval, covers drivers who worked for Lyft from April 2016 through December 15, 2020.
- California Attorney General Rob Bonta said thousands of drivers will be eligible for lost wages and benefits during the period when they would have been considered employees under California labor law.
- The settlement includes $237,075,000 reserved for drivers who worked for Lyft, with about 87% of the total going directly to drivers.
- Bonta alleged that Lyft misclassified drivers as independent contractors rather than employees, violating California Labor Code sections and the state’s Unfair Competition Law.
- Lyft maintained that it had complied with the law and disputed the underlying allegations, but said it was glad to put the case behind it.
- The settlement also includes $5.45 million in penalties that otherwise could have gone to the state.
- A website, email address, and call center will be set up to inform and answer questions from drivers who believe they are eligible for restitution.
- The case was brought by the state along with Los Angeles, San Francisco, and San Diego, and was later consolidated with lawsuits filed on behalf of thousands of Lyft drivers.
- Lyft and Uber have faced similar disputes outside California over whether drivers should be treated as employees or independent contractors.
- The California Supreme Court upheld Proposition 22 in 2024, preserving the classification framework for qualifying app-based drivers.
- Bonta noted that rideshare companies like Lyft have enjoyed massive growth and profits on the backs of drivers, many of whom are from immigrant communities and communities of color.
What's still developing
- Lyft will pay $272.5 million to settle California driver wage theft claims - reuters.com.
- California's Labor Commissioner's Office said the proposed settlement is the largest settlement involving wage-theft claims in the state's history.
- Employees are generally entitled to protections such as minimum wage and overtime under applicable federal and state laws, while independent contractors do not receive those employee protections in the same way.
- In a statement, the company said its drivers “have always been properly classified under the law” and added, “we're glad to put this case behind us.” The agreement brings to a close a significant legal dispute over Lyft's treatment of its California drivers during a period when the state's gig-economy companies faced increasing scrutiny over worker classification.
- Officials say the classification allowed Lyft to avoid obligations including minimum wage, overtime, rest-break premiums, reimbursement for business expenses, paid sick leave and timely wage payments.
- The Labor Commissioner sued Lyft in Alameda County Superior Court in August 2020.
- Fort Wayne, IN Legal News, Information & Blogs Lyft has agreed to pay $272.5 million to resolve California claims that it misclassified drivers as independent contractors and denied them wages and workplace protections available to employees, in what state officials say is the largest wage-and-hour settlement in California history.
- Lyft does not admit wrongdoing under the settlement and maintains that its drivers were properly classified.