DoorDash Settles for $17 Million Over Tipping Practices in New York
DoorDash agrees to pay $17 million to New York delivery workers after unfairly using customer tips to cover wages from 2017 to 2019.
Overview
DoorDash will pay $16.75 million to settle allegations in New York that it illegally used customer tips to cover minimum wages for delivery workers from May 2017 to September 2019. New York Attorney General Letitia James announced that approximately 60,000 delivery workers will be compensated, with each eligible worker receiving between $10 and $14,000, depending on the delivery hours. The settlement mandates greater transparency in DoorDash's tipping practices moving forward, and the company claims the outdated pay model has been retired since 2019.
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DoorDash used customer tips to offset the guaranteed wages of its delivery workers, misleading both customers and workers. If a customer tipped, DoorDash would use that tip to reduce its own contribution to the worker's guaranteed pay.
Approximately 60,000 delivery workers will benefit from the settlement, with each eligible worker receiving between $10,000 and $14,000.
DoorDash must end the practice of using tips to offset guaranteed pay, ensure full disclosure of its pay policies to both workers and customers, and provide workers with detailed breakdowns of their earnings.
DoorDash stopped using the deceptive tipping practice in September 2019.
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