New York City Mayor Eric Adams and New York City Department of Consumer and Worker Protection (“DCWP”) announced that the City of New York has set a first-of-its-kind minimum pay rate for app-based restaurant delivery workers.
Effective July 12, 2023, the pay rate will increase from $7.09 per hour to $17.96 per hour. The minimum wage will increase to $19.96 per hour when it is fully phased-in on April 1, 2025. The rate will also be adjusted annually for inflation.
New York’s new rule does allow flexibility in how companies to pay their workers — they can compensate per trip, per hour worked or a combination of both — but no matter the choice, the earnings must amount to $17.96 per hour.
Food delivery companies will also be required to pay their workers 30 cents per minute when they are “on call” — meaning they’re connected to the app but waiting to receive an order — and 50 cents per minute when they are on a trip, actively delivering food. The latter rate will increase to 53 cents in 2024 and 55 cents in 2025.
In September 2021, the New York City Council passed Local Law 115, requiring DCWP to study the pay and working conditions of app-based restaurant delivery workers and to establish a minimum pay rate for their work based on the study results. The new rate increase is a result of the study and a press release from the NYC Council states that the research revealed that, “[t]he final rate [] takes into account that, as independent contractors, delivery workers pay out-of-pocket for their expenses and do not have access to workers’ compensation insurance, or paid time off, and must pay more in Medicare and Social Security contributions.”
The DWCP will monitor whether apps and other businesses are adhering to the new requirement. We will continue to monitor any developments and will keep you apprised of same. Should you have any questions, please contact Ali Law Group.
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