Lyft agrees to pay California $272.5m over wage theft

Lyft agreed to pay the state of California $272.5 million on Thursday to settle claims that it deprived drivers of wages by mislabeling them as independent contractors rather than employees. Rob Bonta, California's attorney general, called the agreement a landmark win and the largest wage theft settlement in state history.

The agreement remains subject to court approval and covers alleged violations between April 2016 and December 2020. Once approved, more than $237 million will be distributed to thousands of Lyft drivers involved in the case. Lyft stated that drivers have always been properly classified under the law and added that it is glad to put the litigation behind it.

California first filed the lawsuit in 2020, and the cities of Los Angeles, San Francisco, and San Diego subsequently joined before the action was merged with driver lawsuits. While independent contractors do not receive overtime, paid sick days, social security, or health insurance, California voters passed Proposition 22 in November 2020 to exempt ride-share drivers from standard employment laws. A near-identical state lawsuit against Uber continues. In 2023, Uber and Lyft jointly agreed to pay $328 million to settle similar classification claims in New York.