NY State Court Allows $17.96 Minimum Wage for App-Based Food Delivery Workers to Go Forward – First Law of Its Kind In U.S. – Denying Motion for Preliminary Injunction By Uber, DoorDash and Grubhub

Last week, a New York State Court rejected a motion by Uber, DoorDash and Grubhub for a preliminary injunction to stop a minimum wage of $17.96 from taking effect for those companies’ app-based food delivery workers in NYC.  This minimum wage was previously set to take effect on July 12, 2023 and is scheduled to rise by $1 per year, up to $19.96, by April 1, 2025.  

The new law is the first of its kind in the U.S. and is notable because it applies to app-based delivery workers who – in the current “gig economy” – have been treated as independent contractors with supposed flexibility to set their own hours and work conditions.  Previously, minimum wage laws did not protect such contractors, only employees.  

Importantly, under the new law, companies are required to pay workers for both time spent: 1) making deliveries; and 2) on-call waiting for a job.  While Uber, DoorDash, and Grubhub argued that requiring compensation for on-call time undermined worker flexibility and posed a “grave threat to their business model and the gig economy as a whole,” the Court rejected this argument, noting, among other things, that companies could “condition future work opportunities based on performance during on-call time.”  Please click here to view the decision.

The Court further stated that, “Higher compensation, including for on-call time, need not be mutually exclusive with worker flexibility, and it is not irrational to pursue both goals simultaneously.”

NYC estimates that delivery workers currently make about $11 per hour.  “Right now, they are earning poverty wages courtesy of these multibillion dollar apps,” a lawyer for the City said.