The State of California took action against Maplebear Inc, doing business as Instacart, over workplace practices. Instacart was accused of failing to provide its contract workers with proper rest breaks and meal periods.
The lawsuit alleged that Instacart's contract workers were required to be available to work for up to 11 hours a day, with only 30 minutes of paid rest time. This left them with little time to take a full 30-minute meal break.
Instacart's contract workers were also required to be available to work on their days off, without being paid for these periods. This made it difficult for them to take time off when they needed it.
The lawsuit claimed that Instacart's practices were in violation of the California Labor Code.
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Key Developments
The state of California vs Maplebear Inc. DBA Instacart has been a complex case with several key developments.
In 2020, the California Employment Development Department (EDD) audited Instacart and determined that it owed the state $4.1 million in unpaid taxes for 2018.
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The audit found that Instacart misclassified its workers as independent contractors, rather than employees, which led to the tax liability.
Instacart initially challenged the audit results, but in 2021, the company agreed to pay the $4.1 million in back taxes, plus interest and penalties.
This marked a significant concession for Instacart, acknowledging its responsibility for the tax debt.
The California Labor Commissioner's Office also investigated Instacart's business practices, citing the company for allegedly misclassifying its workers as independent contractors.
This investigation led to a $1.2 million fine for the company.
In 2022, Instacart announced that it would begin treating its workers as employees, rather than independent contractors, in response to the ongoing litigation and regulatory scrutiny.
This change was a significant shift in the company's business model.
For another approach, see: State Unemployment Tax Rates by State
Settlement Details
More than 125,000 people who worked for Instacart as "shoppers" between September 13, 2015 and December 15, 2020 are eligible to receive payments.
Instacart agreed to pay $46.5 million in restitution and penalties as part of the settlement.
The payments will be sent out by settlement administrator Simpluris, and the size of payments will depend on the number of hours worked during the specified time period.
Eligible workers could see payments exceeding $10,000, with the most active workers receiving the largest payments.
Nearly $40 million of the total settlement amount will be used as restitution, with the remaining civil penalty funds going into a trust fund for consumer protection laws.
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Frequently Asked Questions
When can I expect my Instacart settlement check?
Instacart workers can expect their settlement checks to be sent out this week, with digital payments starting on September 21, 2023. Keep an eye out for your payment, as it's on its way to you.
Are Maplebear and Instacart the same?
Yes, Maplebear Inc. and Instacart are the same company, doing business under the Instacart name. Instacart is a subsidiary of Maplebear Inc., a grocery technology company in North America.
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