fbpx New York’s Delivery App Minimum Pay Rules Explained - Documented
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Feb 16, 2024 | Amir Khafagy

New York’s Delivery App Minimum Wage Law, Explained

Here are some answers to the most common questions surrounding the new minimum pay rate law for delivery app workers.

Since New York City’s historic minimum wage law for app-based delivery workers came into effect last December, numerous labor issues have surfaced. Apps like Uber Eats and DoorDash have implemented new policies to limit the number of delivery workers on the road and have made tipping harder. The workers themselves have reported unfair deactivations based on minor infractions.

A recent Documented investigation found that, since December, the New York Department of Consumer and Worker Protection (DCWP) has received approximately 500 complaints from delivery workers about apps not complying with the minimum pay rate.

If you’re a delivery worker, the new law may be confusing. We’ve answered some of the most common questions surrounding the new law and explained your rights.

What is the minimum wage for app-based delivery workers?

Initially opposed by the three major apps — UberEats, DoorDash, and Grubhub — the new law came into effect last December after the apps sued to block it from passing. According to the new rules, the app companies are allowed to choose one of two methods to calculate pay for workers. They can pay a rate of $17.96 an hour for all of the time a worker is logged into the app, including waiting time, or they can pay an alternative method rate of $29.93 an hour that only pays workers for the time it takes for them to make a delivery. It does not pay workers for the time they spend waiting for an order. That amounts to approximately $0.50 per minute of trip active time. 

The law states that the second payment method can only be used if a company has a utilization rate above 53%. A utilization rate is basically how busy a delivery worker is. To calculate an app’s utilization rate, apps will take the amount of time a worker takes while on a delivery for the app and divide that by the workers’ total time they are connected to that app, including both “trip time” and “on-call time.” The apps will measure this utilization rate each week to calculate if a worker is above the 53% threshold.

For example, if a delivery worker spends 10 hours on trips for an app during a pay period, the apps cannot pay that worker less than $299.30 for the pay period, which is the seven-day period the apps use to calculate the money they owe workers.

Currently, apps like Uber Eats and DoorDash have chosen to pay workers the $29.93 an hour alternative rate. The apps are not required to disclose to workers what method they are using until the end of the weekly pay period.

Are all delivery workers covered?

The new law only applies to workers who perform restaurant deliveries as independent contractors. There are currently only 10 apps that fit that description under the law. Uber Eats, Grubhub, DoorDash, and Relay (a NY-based delivery app) are by far the four largest app-based delivery companies in the city, responsible for 99% of all deliveries. Workers who deliver for Chowbus, HungryPanda, Fantuan, Club Feast, Patio, and GoHive are also covered under the law.

The law does not cover grocery delivery workers who deliver for apps like Instacart, Postmates, and Gopuff. 

What about tips and weekly earnings?

Although delivery apps have begun to restructure how tips are paid by removing tipping options at checkout, nothing in the law itself affects the amount a worker earns in tips. 

Under the new law, the companies must pay delivery workers at least $17.96 per hour before tips. All tips are additional income on top of that hourly pay. Because of the new law, delivery workers should see higher earnings, even before tips are calculated. The minimum pay law ensures that workers don’t have to rely solely on tips to survive. 

Nothing in the law restricts the hours or ability of delivery workers to work. However, the companies have begun finding new ways to decrease potential earnings. 

After the new law was passed in December, UberEats introduced a new policy limiting the number of workers who can be online each hour of the day. To be able to work, delivery workers are now required to make reservations for the times they’d like to work during the week. Priority access will be given to workers who complete the highest number of trips in the previous 28 days and maintain a high order acceptance rate.

DoorDash has also made similar changes to its platform that limit the number of delivery workers delivering on its platform at any given time. 

Workers can still choose which order they wish to accept or not, but rejecting orders can adversely affect their rating in the app. With Uber Eats and DoorDash’s new policy, if workers reject orders for any reason, for instance, the distance it takes to deliver an order, it may affect a worker’s ability to receive future orders, thus decreasing their overall earnings. 

What if a company refuses to pay a minimum wage?

If workers believe they are not being paid the minimum payment, they should contact the DCWP. Workers can reach them by calling 311 and saying “delivery worker.” They can also contact DCWP online at nyc.gov/workers for any questions or to file a complaint. For additional assistance, workers can reach out to the Worker’s Justice Project, and they could help file a complaint.

Workers may be entitled to three times any minimum payment owed if an app is found to be in violation of the new law.

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