DoorDash has agreed to pay $5.3 million to about 4,500 drivers, the San Francisco city attorney announced Monday, ending an investigation that started over claims that the food delivery giant misclassified workers as independent contractors and used tips to subsidize their base pay.
Attorney David Chiu said the deal will end the investigation the San Francisco Office of Labor Standards Enforcement started two years ago over allegations that DoorDash Inc. misclassified its delivery drivers, also known as Dashers, in order to avoid providing sick leave, which also factored tips into their pay rate.
“We are living through an era of deep inequality, and nothing could be more important than ensuring workers are paid fairly and their benefits are safeguarded,” Chiu said in his announcement.
Independent contractors aren’t entitled to several legal protections and benefits, including minimum wage, overtime pay and paid sick time.
The settlement is the largest San Francisco Office of Labor Standards Enforcement secured since its inception 25 years ago, according to the announcement.
The deal will distribute $5.1 million directly to workers who made deliveries between 2016 and 2020, including in the midst of the coronavirus pandemic. A total of about $187,000 will be allocated to cover the Office of Labor Standards Enforcement’s costs and bolster future enforcement efforts.
San Francisco city attorney claimed that the Office of Labor Standards Enforcement formally started to investigate claims that DoorDash violated San Francisco’s Health Care Security Ordinance and Paid Sick Leave Ordinance in 2019.
The investigation followed Office Supervisor Aaron Peskin’s complaint against the company filed three years ago. The complaint followed media reports that the app-based delivery company misclassified its workers and misused their tips.
“While this wage theft complaint was filed three years ago, it covers conduct that DoorDash continued during the pandemic, a particularly devastating time for workers and small businesses,” Peskin said the announcement, “We hope this victory brings restitution and relief to those harmed, including the knowledge that this settlement is a tacit acknowledgement that drivers are workers – and as such, have rights and protections under the law.”
DoorDash continues to deny any wrongdoing, claiming that “This settlement represents a fair compromise that will allow us to focus on continuing to provide the best experience for Dashers.”