Wolt Agrees to Pay $8.5 Million in Back Pay to Israeli Delivery Drivers
Food delivery company Wolt has reached a settlement agreement in a class-action lawsuit, agreeing to pay approximately $8.5 million (34.3 million shekels) to 82,000 delivery drivers in Israel. The agreement, submitted to the Tel Aviv Regional Labor Court, also mandates that Wolt will guarantee its drivers receive at least minimum wage for their work, though they will not be classified as employees. The lawsuit, initiated by former Wolt driver Golan Hazanovich, questioned the employment status of the drivers and whether they were in an employer-employee relationship with the company. Hazanovich argued that drivers were integral to Wolt's operations and dependent on the company, thus entitling them to social benefits like pension, vacation days, sick pay, and severance.
Wolt maintained that its drivers are independent contractors with the freedom to choose when and how much they work. Under the proposed settlement, which requires court approval, drivers who meet certain conditions will continue to be considered independent contractors. However, Wolt will provide a one-time payment to drivers active since November 2018, with the amount varying based on the number of deliveries completed, ranging from 50 shekels for one delivery to 0.2 shekels per delivery for those completing over 7,000 deliveries. The total cost of this part of the settlement is estimated at $8.5 million, though it could increase.
Beyond the back pay, the agreement introduces a new mechanism ensuring that the average hourly earnings for active drivers will not fall below the minimum wage. Wolt will be required to calculate monthly earnings and hours, and cover any shortfall. An external accountant will oversee this process quarterly. The settlement also includes an incentive for pension savings, offering a 50% match on drivers' contributions up to the legally required amount, provided they meet age and activity criteria.
Furthermore, Wolt will provide accident insurance coverage for its drivers, with minimum payouts for death, disability, and cases involving children. The company will also offer road safety training. Drivers will have a chance to present their case before termination, except in specific urgent situations. Wolt will also adhere to laws regarding sexual harassment prevention and equal opportunities for people with disabilities.
The settlement follows a six-year legal process and is seen as having broad implications for platform economy workers in Israel. The court had previously found a "reasonable possibility" of an employer-employee relationship. The case proceeded through appeals and mediation, with the parties opting for a settlement rather than a definitive court ruling on the core issue of employment status. The agreement will only take effect upon final court approval, and drivers will have the option to opt out and pursue individual claims.
