Lyft to Pay $272.5 Million in Record California Wage-Theft Settlement

Lyft will pay $272.5 million to settle a California wage-and-hour lawsuit, marking the largest such settlement in state history. The agreement resolves allegations the company misclassified drivers as independent contractors between 2016 and 2020, denying them minimum wages, overtime, rest-break premiums, expense reimbursements, accurate wage statements, timely payments, and sick leave.

Eighty-seven percent of the settlement will go directly to drivers. Lyft stated it believes drivers were properly classified under the law and welcomed closing the case, noting that most rideshare drivers in California have preferred contractor status, a preference voters affirmed with Proposition 22 in 2020.

The California Labor Commissioner’s Office filed suit in 2020, later coordinated with actions by the state attorney general and city attorneys of Los Angeles, San Diego, and San Francisco. Rideshare Drivers United helped drivers file wage claims through 2020. California Labor Commissioner Lilia García-Brower emphasized the settlement honors workers who spoke up and ensures workplace protections have real meaning.

The settlement follows recent progress for gig-worker rights, including the certification of the California Gig Workers Union under Assembly Bill 1340, granting rideshare drivers collective bargaining rights.