Lyft has agreed to pay $272.5 million to settle a lawsuit accusing the ride-hailing company of misclassifying drivers as independent contractors rather than employees, in violation of California law. The settlement, which still requires a judge’s approval, covers alleged violations from April 2016 to December 2020, a period during which California was grappling with the status of gig economy workers.

The California Labor Commissioner, Lilia García-Brower, noted that the settlement was a victory for the workers who came forward and spoke up, adding that the state will forgo its share of the settlement to aid drivers who filed wage claims.

This agreement comes after Lyft, Uber, and other companies faced legal action due to their classifications of gig workers. In 2020, voters passed Proposition 22, providing a carve-out from Assembly Bill 5, which required these companies to classify gig workers as employees, thus entitling them to minimum wage, workers’ compensation, and other benefits.

While this settlement closes the legal chapter for Lyft, Uber still faces a lawsuit from the California Labor Commissioner’s Office, making similar allegations. The outcome of these cases could set a precedent for how gig economy workers are classified and treated in the future.