New York City has become the first major U.S. city to establish a minimum pay-rate for app-based restaurant delivery workers. The new law goes into effect July 12, 2023.
With the heightened demand for food delivery during the COVID-19 pandemic, increased attention has been brought to app-based food delivery (such as Grubhub or DoorDash) workers and their working conditions.
App-based delivery workers are typically classified as independent contractors, and not employees. This means they are not entitled to the same protections as delivery drivers who work as employees directly for restaurants, including the requirement that they are paid at least minimum wage.
In response to the increased demand and concerns over the pay the app-based delivery drivers receive in addition to having to cover all of their on costs and expenses associated with operating their vehicle, New York City implemented a new minimum pay-rate for app-based food delivery workers.
Under new regulations, effective in New York City on July 12, 2023, apps that pay a worker for all the time the worker is connected to the app (i.e., time waiting for trip offers and trip time) must pay at least $17.96 per hour (approximately $0.30 per minute), not including tips. This rate is set to increase to $19.96 per hour on April 1, 2025, with an annual adjustment for inflation. Apps that pay a worker only for trip time (i.e., time from accepting a delivery offer to dropping off the delivery) must pay at least approximately $0.50 per minute of trip time, not including tips.
This new law marks a significant change for the city’s more than 60,000 app-based delivery workers, who currently earn an average of $7.90 per hour, which is significantly lower than New York City’s minimum wage of $15 per hour for employees. However, the reaction to the news has been mixed. Some are championing the change as a major win for delivery workers given that their status as independent contractors has previously excluded them from statutory minimum wage protections. They also say this move reflects an appreciation for the contributions of app-based delivery workers, who have braved the pandemic, extreme weather conditions, and other difficult circumstances to serve New Yorkers.
On the other side, the app-based food delivery companies such as DoorDash and Grubhub have filed lawsuits to strike down the minimum wage law. A Manhattan court heard arguments from both sides earlier this month and a decision is expected soon.
Despite differences in how the new wage rules are being perceived, there is no question the adoption of these regulations protects workers who work near, at, or below minimum wage. The new law is in line with previous changes in the city, such as the Fair Workweek Law dictating schedule certainty for fast food and retail workers, just cause protections for fast food employees, and requirements for weekly pay and bathroom access for delivery workers.
Are you a delivery driver with questions about your rights? Call us at (513) 202-0710 or fill out the contact form below for a free consultation.
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