DoorDash to pay $131.5 million for NYC delivery worker wage violations

Settlement Reached for Wage Violations

DoorDash has agreed to pay $131.5 million as part of an enforcement action by New York City for violating the city's minimum wage and delivery work protection laws. The settlement includes payments for late or missing wages, civil penalties, and specifically addresses a disagreement over how to calculate pay for the time delivery workers spend online between deliveries.

Investigation and Worker Compensation

The enforcement action resulted from an investigation by New York's Department of Consumer and Worker Protection (DCWP), prompted by worker reports of payment issues. Over $115 million will be distributed to more than 260,000 affected workers, with compensation calculated at approximately 200 percent of the underpaid amount.

Reasons for Payment Irregularities

DoorDash attributed some missing or late payments to technical issues and complications such as deliveries crossing city boundaries, having multiple stops, or being partially fulfilled or canceled. The company also violated New York's minimum wage laws regarding payment for 'on-call' time, which is the time workers spend online between deliveries. DoorDash stated it chose to follow the city's guidance rather than litigate the calculation method.

Future Compliance and Monitoring

Beyond financial payments, the settlement includes a compliance monitoring program to prevent future violations. DoorDash will share monthly data with the DCWP for three years and update its app and internal controls to ensure workers are compensated for on-call or trip time. Additionally, the Workers' Algorithm Observatory and the Workers' Justice Project will develop software to help workers track their delivery and pay information.