DoorDash will pay $131.5 million for missing and miscalculated NYC delivery worker wages

The company blames technical errors and a difference of opinion on how wages should be calculated for pay irregularities.

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New York City has announced that DoorDash will pay $131.5 million as part of an enforcement action for violating the city's minimum wage and delivery work protection laws. The settlement covers late or missing payments for delivery workers, civil penalties and specifically "over $83 million to resolve a disagreement over how to calculate pay for time Dashers spend online between deliveries," DoorDash said in a separate announcement on its website.

The enforcement is the result of an investigation conducted by New York's Department of Consumer and Worker Protection (DCWP), based on reports from workers of late or missing payments for completed deliveries. As part of the settlement, workers will receive more than $115 million total, with more than 260,000 affected workers receiving compensation "calculated at approximately 200 percent of the amount they were underpaid," according to the city.

DoorDash attributes some of these missing or late payments to technical issues and other complications like "deliveries that crossed city boundaries, had multiple pickup or drop-off locations or were only partially fulfilled or cancelled." Some payments were also different because DoorDash violated New York's minimum wage laws. As the company explains in its settlement announcement, New York's law says workers "must be paid for this time spent online between deliveries," or on-call time. While the company claims its approach to calculating on-call time was "fair, practical and legal," it decided to follow the city's guidance rather than fight in court.

Besides the payments to workers and the DCWP, the settlement also establishes a compliance monitoring program to address future violations. DoorDash has agreed to share monthly data with the DCWP for the next three years as part of the program, and to update its app and adopt "internal controls" to address the issues that led to the violations and prevent workers from being offered deliveries unless they're compensated for on-call or trip time. To make it easier for people to compile data about their delivery work, the Workers' Algorithm Observatory and the Workers' Justice Project have also committed to building software to allow workers to capture the information DoorDash shows them about their deliveries and pay.

DoorDash, like other delivery companies, has generally pushed back on attempts from cities and states to regulate their platforms or secure protections for delivery workers, including even minor changes like a law that would require the company to suggest customers tip at checkout. At least when it comes to the late and missing payments, the company was willing to admit, in its own words, that it "screwed up."