Labor & Employment Law Daily Wrap Up, LITIGATION NEWS, TRENDS—DoorDash, Amazon pay millions to settle NY, DC tipping cases, (Feb 26, 2025)

By Jonathan Anderson

The settlements stem from allegations that the companies failed to pay delivery drivers the full amount of tips from customers.

DoorDash and Amazon will pay millions in settlements to resolve allegations that they failed to pay workers their full tips in New York and Washington, D.C. Meanwhile, California authorities have cited a home care provider for multiple labor law violations and two plumbing contractors for exposing workers to safety hazards. Prosecutors also have filed suit against a D.C. restaurant alleging wage theft, retaliation, and other violations of district labor laws.

Tipping settlement. DoorDash, Inc. will pay $16.75 million in restitution to New York delivery drivers to resolve allegations that it cheated drivers out of their tips and mislead customers about its tipping practices.

In a settlement with the Office of the New York State Attorney General, the food-delivery app also agreed to spend $1 million in administrator costs to help disburse the payments to as many as 63,000 drivers in the state.

An investigation found that between May 2017 and September 2019, DoorDash used tips to offset the base pay it had already guaranteed to workers instead of giving workers their full tips, according to the attorney general’s office.

The probe found that under DoorDash’s deceptive pay model, workers were only able to see their tips if they were greater than the amount DoorDash had already guaranteed to pay them for the order. DoorDash would always pay a minimum of $1 to the driver and would use the tips paid by the customer to offset the rest of the amount guaranteed to the delivery worker.

In addition to the restitution, an assurance of discontinuance requires DoorDash to:

• Maintain a pay model that ensures consumer tips are paid to drivers in their entirety, without impacting DoorDash’s contribution to guaranteed pay;

• Clearly disclose pay policy details to both drivers and consumers, and share a breakdown of base pay, promotional bonuses, and tips with drivers for every delivery; and

• Provide drivers, including previous drivers, with access to their delivery history for at least four years.

DoorDash has reached similar settlements with other jurisdictions, including Illinois and Washington, D.C.

Deceptive tipping practices. Amazon.com, Inc. and Amazon Logistics, Inc. will pay $3.95 million to resolve claims that it deceived District of Columbia consumers about its tipping practices to Amazon Flex delivery drivers.

The settlement, with the Office of Attorney General for the District of Columbia, includes $2.45 million in penalties and $1.5 million in costs.

In 2022, the attorney general filed suit alleging that the company violated D.C.’s consumer protection laws by falsely leading customers to believe their tips were increasing delivery worker pay by the amount they tipped. In truth, much of the tips were diverted to reduce Amazon’s labor costs and increase profits, the attorney general’s office said.

The settlement also requires Amazon to make clear disclosures about how tips are used on both its website and its app if the company uses tips for any purpose other than increasing driver compensation.

Previous legal action required Amazon to pay back wages owed to the drivers.

The attorney general’s office filed the lawsuit in the Superior Court of the District of Columbia; the case is No. 2022-CAB-005698.

Independent contractor misclassification. The California Labor Commissioner’s Office (LCO) has issued citations totaling $2,327,257 in damages and penalties against Amity In-Home Care Services, Inc. for multiple labor law violations.

The home care provider misclassified caregivers as independent contractors, neglected to give misclassified workers proper wage statements, failed to properly pay workers overtime wages, and did not provide required workers’ compensation insurance, among other infractions, according to the LCO.

Amity’s violations resulted in:

• $422,033 in unpaid minimum wages;

• $424,809 in unpaid overtime wages;

• $165,162 in meal and rest period premiums;

• $27,400 in wage statement penalties;

• $108,094 in waiting time penalties for delayed final wages;

• $550,000 in penalties for willful worker misclassification;

• $81,673 in penalties for no workers’ compensation insurance for the misclassified employees;

• $422,033 in liquidated damages; and

• $18,950 for other civil penalties.

Of the total amount cited, which includes interest and additional penalties, $2,203,384 is payable to the workers.

The violations came to light after the LCO received a referral of suspected worker misclassification in April 2023. In response, an inspection was conducted and resulted in an immediate stop order penalty assessment because of the company’s failure to provide worker compensation insurance for employees, according to the LCO.

The citations against Amity are the first the LCO has issued under California Labor Code Section 181, which took effect in 2024. Previously, the civil penalties collected from employers for such violations were payable solely to the state. Labor Code Section 181 allows the state to collect these amounts as damages payable to affected workers.

Safety hazards. The California Division of Occupational Safety and Health (Cal/OSHA) has cited employers Smelly Mel’s Plumbing and Sewer Rat Plumbing for exposing workers to safety hazards at a worksite in San Mateo, with proposed penalties against the two companies totaling $529,640.

On August 1, 2024, crews were working on a sewer line project at a private residence when a trench collapsed, burying a worker under the debris and causing serious injuries that required hospitalization.

Cal/OSHA found a total of 16 violations, evenly split between both businesses, including failures to:

• Ensure that a competent person conducted daily inspections of the trench, adjacent areas, and protective systems that could have detected hazardous conditions such as cave-ins.

• Provide the construction workers a ladder or other safe means of exiting the trench.

• Provide adequate protective systems, such as shoring, shielding, sloping, or benching to the trench to prevent its collapse.

• Protect workers from excavated materials or equipment that could pose a hazard by falling or rolling into the trench.

• Ensure that workers had proper foot protection, which exposed at least one worker to foot injuries when using a jackhammer.

• Ensure an appropriate number of trained persons were at the jobsite to render first aid.

• Notify the division prior to the start of the annual permit-required activity of constructing an excavation over 5-feet in depth.

• Conduct a toolbox safety meeting at the jobsite with the crew for the duration of the project.

Among these citations were two willful, serious accident-related violations, which Cal/OSHA said means the businesses were aware of the safety hazards, had prior warning, and still failed to take corrective action.

Employers have the right to appeal any Cal/OSHA citation and notification of penalty by filing an appeal with the state’s Occupational Safety and Health Appeals Board within 15 working days from the receipt of notification.

Alleged wage theft, retaliation. The Office of the Attorney General for the District of Columbia has filed a lawsuit against MH Hospitality Corp. dba Talea Ristorante and its owner for wage theft, retaliation, and other violations of district labor laws.

Prosecutors allege that the Italian restaurant paid employees less than half of the tipped minimum wage, failed to ensure tipped workers’ take-home pay meets the regular minimum wage, and denied workers paid sick leave and overtime pay, even as some employees clocked 70-hour weeks.

The employer also allegedly prohibited workers from discussing their pay with one another, retaliated against those who protest their mistreatment by threatening and firing them, and failed to maintain required employment records.

The complaint, filed in the Superior Court of the District of Columbia, seeks a declaratory judgment that the employer’s conduct is unlawful and an injunction prohibiting further violations. The complaint also seeks back wages and additional restitution for workers who have been denied the minimum wage, overtime, and paid sick leave, as well civil penalties.

Companies: DoorDash, Inc.; Amazon.com, Inc.; Amazon Logistics, Inc.; Amity In-Home Care Services, Inc.; Smelly Mel’s Plumbing; Sewer Rat Plumbing; MH Hospitality Corp.; Talea Ristorante

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