Uber and Lyft must now pay their rideshare drivers in Massachusetts a minimum hourly rate of $32.50 and company-provided benefits, per the new settlement.

In 2020, a lawsuit against the ride-hailing companies was filed after misclassifying drivers as independent contractors instead of employees.

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Uber, Lyft Provide Minimum Pay for Drivers

The four-year lawsuit argued that the companies did not compensate their drivers for their time spent while waiting or driving for passengers. The drivers were also not entitled to earn one hour of sick leave for every 30 working hours.

The settlement states that rideshare drivers are entitled to an earnings floor minimum pay of $32.50 per hour, starting August 15.

An annual increase must also be rewarded based on the percentage of the annual rate and average inflation rate preceding 12 months, effective on January 15, 2025.

Any disputes concerning the minimum wage of a driver may seek additional compensation from the company. The companies must check if there are any discrepancies in the payment.

Uber, Lyft Drivers Entitled to Company Benefits

The companies are now required to give paid sick leave to drivers who completed eligible trips, starting November 1. Drivers can earn one hour of sick pay for every 30 working hours that can be used upon recording 90 hours in the app.

Occupational accident insurance for all drivers must be provided on or before October 1. The insurance will cover medical expenses and lost income due to the injuries while the driver is working.

Drivers are also entitled to a portable health fund by March 1, 2025. The companies will be choosing a neutral third-party administrator to determine the drivers' eligibility.

Special protections against discrimination, retaliation, kickbacks, and more are also stipulated under the settlement agreement which will all protect the drivers.

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