Delivery Drivers to Receive Approved Pay Out of $8.75M

Gig economy workers, such as the delivery drivers for Postmates, have begun challenging their employers for potentially misclassifying them as independent contractors instead of employees. Many of these workers argue that due to this alleged misclassification they were paid less than the minimum wage. Following the footsteps of the Lyft and Uber misclassification cases, these delivery drivers filed a class action lawsuit and argued that by being labeled as independent contractors instead of employees, Postmates violated the federal Fair Labor Standards Act (FLSA).

The case recently settled after both parties weighed the pros and cons of going forward to trial.  $8.75 million was the amount reached to help cover the potential wages owed in the class action settlement. The Judge who approved the settlement amount noted that this was a very favorable outcome considering California courts have made no definitive ruling that gig workers like the Postmates’ delivery drivers should be labeled employees over independent contractors.

The class covers delivery drivers in New York, California, Massachusetts, and other states. In addition to the $8.75 million awarded in the settlement, Postmates agreed to change some of its policies and practices such as adopting a new provision which states that the company can only terminate the delivery drivers’ employment contracts for specific reasons and allows the drivers to challenge individual termination decisions. In addition to this, Postmates has also agreed to offer its delivery drivers occupational accident insurance.

It is often difficult for gig economy workers to decipher if they are being paid correctly. A consultation with an employment lawyer may help clarify your employer’s pay practice and any potential wages owed. Fitapelli & Schaffer, LLP will gladly discuss your situation over a free phone consultation and can be reached at (212) 300-0375. You can also visit our website for more information.