SEATTLE — Seattle’s Office of Labor Standards said Wednesday that Postmates, an online food delivery platform, has agreed to pay nearly $1 million to settle allegations it violated the city’s paid sick leave policies for gig workers.
The settlement amounted to $972,075, most of which is for back wages and damages to 1,646 Postmates gig workers in Seattle, the city said in a news release.
The city began investigating the company last fall after many drivers alleged Postmates did not pay them for what should have been paid sick time off, among other potential violations of the city’s Gig Worker Paid Sick and Safe Time policy. The law went into effect in July 2020 after it was unanimously approved by the Seattle City Council.
“For years, us couriers were missing out on many benefits that we need and that we should have received from the start,” Shawn W. Gray, a Postmates driver, said in the city’s news release.
According to the settlement agreement, each driver is to be paid $278 as part of Postmates’ civil penalty, plus an additional amount based on work activity since July 2020. Some drivers are owed amounts nearing $4,000.
Postmates does not admit any wrongdoing as part of the settlement.
Seattle’s paid sick-day policy for gig workers stipulates that drivers accrue one sick day for every 30 days they work. Sick pay is based on the driver’s daily average pay in their highest-earning month since October 2019.
The investigation into Postmates began months before Uber acquired the company in December 2020. Uber itself, in a separate agreement in June, agreed to pay $3.4 million to more than 15,000 of its local drivers who charged they were not compensated for unused paid sick days earlier in the pandemic under the same law.
“We appreciate the Office of Labor Standards’ close coordination with us to correct any outstanding issues,” said an Uber spokesperson in the news release. “We’ve worked tirelessly to ensure that workers on the Postmates’ platform got the paid sick and safe time to which they were entitled.”
Along with paid sick-day policies for gig workers, the city also implemented first-of-its-kind laws to mandate premium pay for delivery-app drivers during the pandemic. That program added $2.50 premiums per trip and saw drivers get paid millions of dollars more during the pandemic for meal delivery services, despite lawsuits from delivery app companies fighting the premium pay policy.
In September 2020, Postmates paid approximately $250,000 to nearly 3,000 workers following a voluntary audit it conducted in response to an Office of Labor Standards inquiry about its compliance with the premium pay law. That same month, DoorDash, another online food delivery platform, paid approximately $110,000 to nearly 3,000 of its own workers after a similar voluntary audit.
“These big gig companies are pretty notorious for … not complying with a lot of laws … so it makes sense that [it] took a couple of steps to bring them into compliance,” said Sage Wilson, a campaign director for Working Washington, a workers’ rights organization.
Overall, the city has done an “excellent job” at supporting gig workers during the pandemic, said Wilson. “These are, to our knowledge, the only successful actions by local government in the country that actually moves money from big gig companies to gig delivery workers.”
