Minimum Wages Increases for New York City App-Based Workers

On April 1, 2024, Mayor Eric Adams and the New York City Department of Consumer and Worker Protection (DCWP) announced delivery platform companies like Uber Eats, DoorDash, and Grubhub must now pay their delivery workers in New York City a minimum rate of at least $19.56 per hour. However, the rate increase isn’t a shock to anyone in the city as in December 2023, New York City became the first major U.S. city to implement a minimum pay rate for app-based restaurant delivery workers. 

Before the law was passed, delivery workers in the city were paid below the minimum wage rate of $5.39 per hour before tips. The law implementation was considered a breakthrough for New York City delivery workers, as initially, the new pay protections were heavily challenged by the platforms through which the workers were employed. 

Karol, a driver who has worked in the delivery industry for several years, says her family has depended on the tips left by customers to fill in the gaps left by the companies, “it’s good to continue putting pressure on the city by demanding the minimum wage,” she claims that the delivery companies demand they do their jobs efficiently, however, refuse to pay them a liveable wage.

In 2023, the Appellate Division First Department court ruled the pay protections could become effective, and the DCWP began enforcing the minimum pay rate of at least $17.96 per hour. Since then, on average, more than 60,000 delivery workers cumulatively earned roughly $16.3 million more per week, which is an increase of 165% in wages as compared to before the law was passed. Overall, workers earned an additional $847.6 million in income annually. 

With the new increase, workers can expect to take home even more, as the minimum pay rate has increased from $17.96 to $19.56 per hour. The nearly $2 increase reflects the 2024 phase-in rate of $18.96 plus an added inflation adjustment of 3.15 percent. Next year, on April 1, 2025, according to the regulations, the minimum pay rate will again increase and reflect a base pay of $19.96 per hour plus an adjustment for inflation. 

From then on, New York City delivery workers will continue to see annual adjustments announced annually.

Delivery Drivers Locked Out of Apps?

While the new law is a significant victory for minimum-wage workers in New York City, the fight doesn’t end here. One primary concern many delivery workers fear is company retaliation. Many fear the apps may try to restrict the number of deliveries workers can receive or lock them out of the platforms altogether. Justice for App Workers (JFAW), a national coalition representing more than 130,000 rideshare drivers and delivery workers, is calling for change.

JFAW has vigorously supported the minimum wage law but also believes that in order to ensure the new changes make a real impact, the government should include lockout protections in conjunction with the wage increase. However, earlier this year, a spokesperson for the DCWP told StreetsBlog, an online news platform founded in 2006, that “mass lockouts” were not occurring.

According to the DCWP, they’ve found the number of orders received by the app stands at 2.6 million per week, which reflects the same numbers before the DCWP began enforcing the minimum pay rate. The change seen may be due to the options provided to the app companies through the new law, which allows them to choose one of two methods to calculate pay for workers. 

The first method allows the company to pay its workers a rate of $17.96 an hour, which includes the hours the worker is logged into the app and waiting for deliveries. The second allows the app to pay its workers a rate of $29.93 an hour; however, the hours included are only for the time it takes the worker to make the delivery, not the wait times.

According to the delivery workers, the apps have mostly opted to use the second method and have also begun pre-scheduling shifts to decrease on-call time. As a result, many workers have claimed to have not only lost their ability to choose their work hours, but if they fail to pre-schedule their shifts, they are unable to log into the app. 

If you are an app-based worker located in New York City and believe your hours have been restricted due to the new wage increase, we may be able to help you. For more information, connect with a Morgan & Morgan attorney by completing our free, no-obligation case evaluation form today.