Lyft Settles California Misclassification Lawsuit for $272.5M
Lyft has agreed to pay $272.5 million to settle a lawsuit brought by the California Labor Commissioner’s Office over its classification of drivers as independent contractors rather than employees, in violation of state labor laws from April 2016 through December 2020. The settlement aims to resolve legal claims that Lyft denied workers minimum wage, overtime pay, and other employee benefits during this period. The case is part of a broader debate over gig worker classification following the passage of Assembly Bill 5 (AB-5) in California, which required companies like Lyft to classify such workers as employees. However, Proposition 22 later exempted app-based transportation services from AB-5 requirements by allowing drivers to remain independent contractors while offering some benefits. The settlement must still be approved by a judge and includes funds for affected drivers who filed wage claims. While this resolves the legal dispute with Lyft, Uber continues to face similar litigation over worker classification in California.
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