On June 12, 2023, the New York City Department of Consumer and Worker Protection (DCWP) released the final rule regarding the required minimum wage for app-based restaurant delivery workers. The rule goes into effect with the first pay period on or after July 12, 2023.
The Details:
Prior to the final rule, there were no minimum pay protections for app-based food delivery workers who work for a third-party delivery service as independent contractors.
Now, beginning with the first pay period on or after July 12, 2023, app-based restaurant delivery workers must be paid a minimum wage as follows:
· Apps that pay for all the time a worker is connected to the app (i.e., time waiting for trip offers and trip time) must pay at least $17.96 per hour, which is approximately $0.30* per minute, not including tips. This rate will increase to $18.96 on April 1, 2024, and $19.96 on April 1, 2025, plus an adjustment for inflation each year;
or
· Apps that only pay for trip time (i.e., time from accepting a delivery offer to dropping off the delivery) must pay at least approximately $0.50* per minute, not including tips. This rate will reach approximately $0.53* per minute on April 1, 2024, and $0.55* per minute on April 1, 2025, plus an adjustment for inflation each year.
* According to the DCWP, due to rounding, these rates are approximate. Apps must calculate exact pay in accordance with DCWP Rule.
Important definitions regarding the final rule are as follows:
Food delivery worker. A "food delivery worker" is someone who is hired, retained, or engaged as an independent contractor by a licensed third-party food delivery service or a third-party courier service to deliver food, beverage, or other goods from a business to a consumer in exchange for compensation.
Food service establishment. A "food service establishment" is a business establishment located within the city where food is provided for individual portion service directly to the consumer whether such food is provided free of charge or sold, and whether consumption occurs on or off the premises or is provided from a pushcart, stand or vehicle.
Third-party courier service. A "third-party courier service" means a service that (i) facilitates the same-day delivery or same-day pickup of food, beverages, or other goods from a food service establishment on behalf of such food service establishment or a third-party food delivery service; (ii) that is owned and operated by a person other than the person who owns such food service establishment; and (iii) and is not a third-party food delivery service.
Third-party food delivery service. A "third-party food delivery service" is any website, mobile application, or other internet service that: (i) offers or arranges for the sale of food and beverages prepared by, and the same-day delivery or same-day pickup of food and beverages from, a food service establishment; and (ii) that is owned and operated by a person other than the person who owns such food service establishment.
Trip. A "trip" is the time spent, distance travelled, and route followed by a worker to provide delivery services to a consumer through a third-party food delivery service or third-party courier service, including travel to a business, picking up the food, beverage, or other goods for delivery, and taking and depositing such delivery at a different location as requested.
Next Steps:
Effective the first pay period beginning on or after July 12, 2023, businesses contracting with app-based restaurant delivery workers as independent contractors must pay at least a minimum wage as outlined above. Businesses impacted by the DCWP final rule should consult with their legal or accounting advisors to ensure compliance.