SAN DIEGO—More than $46 million that grocery delivery company Instacart agreed to pay as part of a settlement with the city of San Diego is ready to be distributed, the San Diego City Attorney’s Office said May 11.
The settlement stems from a lawsuit the city filed in 2019, which alleged Instacart improperly classified workers as independent contractors. The city said the alleged misclassification deprived workers of protections and compensation they would have received as employees, such as overtime pay, paid breaks, and reimbursement for expenses including gas mileage and cellphone data.
The $46.5 million settlement was reached last fall and was recently finalized.
Around 308,000 people who worked for Instacart between Sept. 13, 2015, and Dec. 15, 2020, are believed to be eligible for restitution payments, the City Attorney’s Office said. Individual reimbursements will vary depending on the number of hours each person worked over that time period.
San Diego City Attorney Mara Elliot said in a statement, “It’s gratifying to see hardworking Instacart shoppers receive the compensation they deserve. At the height of COVID-19, they provided a lifeline to California families.”
The lawsuit was described as the first of its kind against a “gig-economy company,” which was filed following a California Supreme Court decision that set a three-prong standard—the “ABC test”—for determining whether a worker was an employee or independent contractor.
Assembly Bill 5, introduced by former Assemblywoman Lorena Gonzalez and later signed into law, expanded the scope of the “ABC test,” and set standards that classified many app-based drivers as employees.
Last October, when the settlement was reached, Instacart said in a statement that its California workers were always properly classified as independent contractors and noted the settlement contains no admission of any wrongdoing.
“We’re pleased to have reached an agreement with the city of San Diego. Instacart has always properly classified shoppers as independent contractors, giving them the ability to set their own schedule and earn on their own terms,” the company’s statement read. “We remain committed to continuing to serve our customers across California while also protecting access to flexible earnings opportunities for Instacart shoppers.”
