The company reportedly failed to provide nearly 4,500 delivery workers in the city with mandated health care coverage and paid sick leave.
Shares of food delivery service DoorDash were falling Monday after the company reportedly agreed to pay $5.3 million to settle allegations of failing to provide proper benefits for workers in San Francisco.
The company reportedly failed to provide nearly 4,500 delivery workers in the city with mandated health care coverage and paid sick leave, the San Francisco Chronicle reported.
“We believe (DoorDash couriers) were misclassified and should have been employees for years,” said San Francisco City Attorney David Chiu. “That is not part of the settlement but it is the perspective of the city.”
DoorDash did not admit any wrongdoing as part of the settlement. DoorDash shares on Monday fell 6.4% to $201.46.
"While we deny any wrongdoing, we feel that this settlement represents a fair compromise that will allow us to focus on continuing to provide the best experience for Dashers," a DoorDash spokesperson said.
Most of the DoorDash settlement money will go directly to workers, most of whom will receive between $500 and $1,500, though some awards will range up to $17,000 depending on how often couriers worked between 2016 and 2020.
A 2019 complaint led to the city's Office of Labor Standards Enforcement investigation and settlement.
Proposition 22, which was passed in late 2020, officially classified couriers in California as gig workers and not employees who require benefits. However, the time covered in the labor investigation appears to be before Prop. 22 passed.
DoorDash says that on average, couriers in cities across California earned over 30% more in January 2021 than they did before Prop 22.
The company estimates that DoorDashers in the Bay Area earned over $36 per hour while on deliveries, compared to $25 per hour nationally.
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