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Postmates Settles Lawsuit for Nearly $1 Million Over Alleged Violations of Paid Sick Leave Rule

The settlement relates to a 2020 Seattle ordinance that temporarily provides paid sick leave for gig workers during the pandemic

A cell phone displays the Postmates logo in an app store.
Postmates allegedly failed to pay drivers adequate sick and safe time, per a Seattle ordinance enacted in July 2020.

Gig workers in Seattle just scored a major victory. On Wednesday, August 4, Seattle’s Office of Labor Standards (OLS) announced that it has settled a lawsuit for nearly $1 million with third-party delivery app Postmates over alleged violations of the city’s Gig Worker Paid Sick and Safe Time (PSST) ordinance. The settlement includes $949,815.49 in back wages, interest, liquidated damages, and civil penalties to 1,646 gig workers, along with $22,260.40 in fines to the City of Seattle.

Seattle’s ordinance, which the city council passed unanimously and went into effect last July, allows drivers for third-party delivery apps like Postmates access to paid sick time — one day off for every 30 calendar days worked, accrued retroactively to October 2019 (or whenever each worker started employment). It also allows gig workers to use PSST in 24-hour increments to care for themselves or a family member for health reasons, situations related to domestic violence or sexual assault, or if a loved one’s school or place of care has been closed. Workers can use up to three days of paid sick time before being required to produce a doctor’s note or other proof of care, with compensation recalculated every month to reflect earnings changes.

The Office of Labor Standards began an investigation last fall after local workers raised concerns that Postmates was not adequately instituting these benefits, and allegedly violated several other aspects of the law, including failure to provide them with notice of the policy or their sick time balance. Drivers should expect to find payments from the lawsuit within the next 30 days. OLS says it also has two other active investigations going related to PSST, but did not reveal further details.

In December 2020, Uber acquired Postmates, and the company did not admit to any wrongdoing as part of the settlement. “While these issues arose before our purchase of Postmates was finalized, we appreciate the Office of Labor Standards’ close coordination with us to correct any outstanding issues,” says an Uber spokesperson. “We’ve worked tirelessly to ensure that workers on the Postmates’ [sic] platform got the paid sick and safe time to which they were entitled, and we look forward to our continued partnership with OLS.”

This isn’t the first time Postmates was part of a major cash settlement due to Seattle’s gig worker rules. In September 2020, the company, along with DoorDash, paid out more than $350,000 in restitution to drivers after the city’s hazard pay mandate went into effect this summer. DoorDash paid $111,435 to 2,998 workers in Seattle, while Postmates paid $250,515 to 2,975 workers. The hazard pay law requires companies to give gig workers extra money until the end of the city’s civil emergency, which is still in effect now.