Massachusetts Uber and Lyft drivers to earn $32.50 an hour under new settlement

Uber and Lyft drivers in Massachusetts will now earn a minimum of $32.50 an hour plus a range of benefits under a settlement announced Thursday.

The rideshare companies will also be required to pay a combined $175 million to the state of Massachusetts to resolve allegations that they violated Massachusetts wage and hour laws, most of which will be distributed as restitution to current and former drivers, according to Attorney General Andrea Campbell’s announcement.

“For years, these companies have underpaid their drivers and denied them basic benefits,” Campbell said. “Today’s agreement holds Uber and Lyft accountable, and provides their drivers, for the very first time in Massachusetts, guaranteed minimum pay, paid sick leave, occupational accident insurance, and health care stipends.”

Rideshare drivers will now earn one hour of sick pay for every 30 hours of work, in addition to receiving a stipend to buy into the state’s paid family and medical leave program. Drivers working more than 15 hours per week for Uber, Lyft, or both will be able to earn a health insurance stipend.

The rideshare companies must also provide drivers with information about the length and expected earnings of a ride prior to the driver accepting the ride.

“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,” Massachusetts Gov. Maura Healey said.

Then-AG Healey had filed a lawsuit in 2020 alleging that Uber and Lyft misclassified drivers as independent contractors rather than employees under state wage and hour laws.

Under the settlement, the rideshare companies will no longer push for a November ballot initiative that would have sought to guarantee the status of drivers as contractors, who are entitled to less pay and fewer benefits than employees.

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Lyft said in a statement that the settlement was “a major victory in a multiyear campaign by Bay State drivers to secure their right to remain independent, while gaining access to new benefits.”

Uber called the agreement “an example of what independent, flexible work with dignity should look like in the 21st century.”