DoorDash to pay $5.3 million in settlement with San Francisco over labor law allegations

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November 23, 2021

San Francisco’s City Attorney’s office announced a $5.3 million settlement with DoorDash over violations of two San Francisco labor laws. The settlement involves some 4,500 DoorDash independent contractor workers who made deliveries in San Francisco between 2016 and 2020.

San Francisco’s Office of Labor Standards Enforcement investigated alleged violations of the city’s Health Care Security Ordinance and Paid Sick Leave Ordinance by DoorDash. The HCSO requires companies with 20 or more workers to spend a minimum amount on healthcare benefits per covered employee. The PLSO requires companies to provide sick leave to all employees in the city.

DoorDash told the San Francisco Chronicle newspaper the settlement was not an acknowledgement that a judge could have found it to be an employer. DoorDash, itself based in San Francisco, did not admit wrongdoing.

Much of the settlement will go to the 4,500 workers. The city will get $187,046 to cover enforcement costs and bolster future enforcement efforts.

“We are living through an era of deep inequality, and nothing could be more important than ensuring workers are paid fairly and their benefits are safeguarded,” San Francisco City Attorney David Chiu said.

California voters passed Proposition 22 in November 2020 to ensure drivers for firms such as DoorDash remain independent contractors. However, the activity covered by the settlement happened before Proposition 22. In addition, a state judge recently found the law violated the state constitution, though that ruling has been appealed.

The investigation of DoorDash began after San Francisco Supervisor Aaron Peskin filed a complaint when he saw allegations of independent contractor misclassification in the media along with allegations the company subsidized base pay of workers with tips from customers.

“While this wage theft complaint was filed three years ago, it covers conduct that DoorDash continued during the pandemic, a particularly devastating time for workers and small businesses,” Peskin said.

It’s also the largest settlement in the San Francisco Office of Labor Standards Enforcement’s history.

“Throughout the course of the investigation there has been ongoing public debate regarding worker misclassification resulting in precedent-setting court decisions, actions by the state legislature, and even a California ballot initiative,” said Patrick Mulligan, director of the Office of Labor Standards Enforcement.

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