Although Instacart admits no wrongdoing, it settled a $46.5 million lawsuit in San Diego, California: how much and to whom will this money be distributed?
Instacart, the well-known online grocery delivery company, is facing a $46.5 million settlement of a lawsuit filed in San Diego, California.
The settlement stems from a lawsuit filed by the city in 2019 that claimed the company’s delivery drivers were underpaid between 2015 and 2020 and should be classified as independent contractors or employees under California law.
In this regard, San Diego city attorney Mara Elliott alleged that Instacart misclassified its employees.
“It is gratifying to see Instacart’s hard-working shoppers receive the compensation they deserve. At the height of COVID-19, they provided a lifeline to California families,” Elliott said in a statement. “My office will continue to look out for them and other working families.”
The lawsuit, as noted in the release, uses the term “shoppers,” which in English would mean “shoppers.” However, consumers should not be confused, because precisely what is being pointed out is a misuse of classification around its drivers and delivery drivers, i.e., the people who work delivering the groceries and not the final shoppers.
Instacart’s “shoppers” buy grocery orders from various stores and then drop them off at the customer’s home.
Understanding the terminology, the agreement benefits Instacart “shoppers” who were classified as independent contractors when they performed work in California between Sept. 13, 2015, and Dec. 15, 2020.
Elliot argued in the filing that the “shoppers” should have been labeled as employees, guaranteeing more benefits for workers in California.
The lawsuit came in response to a California Supreme Court ruling in Dynamex v. Superior Court that established a new standard for determining a worker’s status. That court decision was later codified into state law.
Instacart admitted no wrongdoing, despite agreeing to a $46.5 million split with the San Diego city attorney to settle the misclassification class action.
The settlement also involves $6 million to be paid to the City Attorney’s Consumer Protection Prosecution Trust Fund.
The size of the payment will be proportional to the hours California Instacart shoppers worked at the time. That means the amount claimants will receive will depend on the number of claims. It is estimated that each verified shopper will receive at least $10.
Instacart shoppers have until August 31, 2023 to file a claim. The application process is done online.