Boston, Massachusetts – Rideshare drivers in Massachusetts are set to receive a significant boost in benefits and pay as a result of a recent settlement reached between the state and rideshare giants Uber and Lyft. Starting on August 15th, drivers will be guaranteed a minimum wage of $32.50 per hour, along with additional company-provided benefits. This development comes four years after Massachusetts Attorney General Andrea Campbell filed a lawsuit against the companies, arguing that their drivers should be classified as employees under state law.

As part of the settlement, Uber and Lyft have agreed to pay a combined $175 million, with the majority of the funds going towards compensating current and former drivers who were deemed to have been underpaid by the companies. The details regarding eligibility and the application process for these payments will be disclosed by Campbell’s office in the upcoming weeks. Despite this financial settlement, drivers will continue to be classified as independent contractors.

In addition to the wage increase, drivers in Massachusetts will also benefit from yearly pay raises based on inflation, as well as an array of employee-like benefits. This includes the opportunity to accrue up to 40 hours of sick leave per year, paid at a rate of $20 per hour. Moreover, Uber and Lyft will provide drivers with stipends to help cover healthcare costs and enrollment in the state’s family and medical leave program, along with offering coverage for work-related injuries.

To ensure compliance with the terms of the agreement, both companies are required to conduct annual audits and submit detailed reports to the Attorney General’s office. Any violations of the settlement could result in various penalties, including restitution, fines, and other sanctions as outlined in the official agreement document.