Lyft agreed Thursday to pay California $272.5m to settle wage theft claims tied to how the company classified its drivers, according to Rob Bonta, the state's attorney general. The settlement is the largest involving wage theft claims in California's history, Bonta said.
More than $237m of the total will go directly to drivers. Lyft faced the claims because it labeled drivers as independent contractors rather than employees. That classification meant drivers did not receive benefits, wage protections or other entitlements that California employment law extends to employees.
The settlement comes as ride-hailing companies face sustained legal pressure over driver status across multiple states. California's Proposition 22, passed by voters in 2020, carved out a limited exemption for app-based transportation and delivery platforms, allowing them to treat drivers as contractors while offering some benefits. The law has faced ongoing legal challenges.
Lyft did not immediately dispute the characterization in the settlement announcement reviewed by this outlet, though the company has historically argued that drivers value the flexibility of contractor status.