DoorDash has agreed to a $16.75 million settlement after New York authorities investigated the company's practice of using customer tips to supplement delivery workers' base pay. The investigation revealed that between May 2017 and September 2019, DoorDash's methodology misreported earnings by effectively using gratuities to offset guaranteed wage amounts. Delivery workers only received tips exceeding a guaranteed minimum, and workers ultimately earned less than expected due to this structure. The settlement aims to provide restitution to affected workers, with some eligible to receive up to $14,000.
During the time period in which the model was used, more than 11 million orders were placed through the app, affecting 63,000 delivery workers.
I have been delivering for DoorDash since they started, but I do not work for them as much anymore because the system was not clear and they were taking our tips.
The investigation found that under this model, DoorDash used tips from customers to offset the base pay it guaranteed to workers rather than giving them the full tips.
The settlement includes $16.75 million in restitution for workers and up to $1 million in settlement administrator costs to help issue the payments.
Collection
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