Massachusetts rideshare drivers will begin earning a minimum of $32.50 per hour and benefits like paid sick leave starting on August 15th. This follows a four-year legal battle between the state and rideshare companies Uber and Lyft. Attorney General Andrea Campbell had argued that drivers should be classified as employees, a move that would have entitled them to additional benefits. While the settlement avoids a definitive ruling on employment status, it significantly boosts their earnings.
In addition to the minimum wage increase, Uber and Lyft will create a $175 million fund to compensate current and former drivers who were previously underpaid. Attorney General Campbell’s office will release details on eligibility and the claims process in the coming weeks. Importantly, the settlement does not change the drivers’ classification as independent contractors.
Beyond the minimum wage, drivers will receive significant benefits, including yearly pay raises tied to inflation (specific percentage to be announced), up to 40 hours of paid sick leave at $20 per hour annually, and access to healthcare benefits and the state’s family and medical leave program. Additionally, Uber and Lyft will cover work-related injuries.
To hold companies accountable, Uber and Lyft will be required to conduct annual audits and submit reports to the Attorney General’s office. Significant penalties will be enforced for violations identified during these audits.
