Uber and Lyft must pay Massachusetts rideshare drivers $32 per hour

Ride-hailing drivers in Massachusetts will soon receive company-provided benefits, as well as a minimum pay of $32.50 per hour, starting August 15. This is thanks to a new settlement between the state and ride-hailing companies Uber and Lyft, four years after Attorney General Andrea Campbell sued the companies, saying their drivers should be considered employees under state law.

The two companies also agreed to pay a combined $175 million, the majority of which will be paid to “current and former drivers who have been underpaid by the companies.” Campbell’s office announced yesterday. The office says it will release details about who qualifies and how to apply “in the coming weeks.” Despite the agreement and the original motivation for the lawsuit, the drivers will still be considered independent contractors.

Still, drivers in the state will receive annual inflation-based pay raises and other employee-like benefits, such as the ability to earn up to 40 hours of sick leave per year, paid at $20 per hour. Uber and Lyft will also give drivers grants so they can purchase health care and enroll in the state’s family and medical leave program, and will cover work-related injuries.

To ensure compliance with the agreement, companies must carry out annual audits and submit reports to the Attorney General’s Office. Punishment for violations may include “any applicable restitution, fines and penalties,” in accordance with the published agreement.