(Reuters) - DoorDash Inc has agreed to pay $2.5 million to settle a lawsuit by the District of Columbia Attorney General's office accusing the food delivery service of violating a consumer protection law by misrepresenting the way it pays workers, according to a court filing on Tuesday.

DoorDash, represented by Harris, Wiltshire & Grannis, and lawyers from Attorney General Karl Racine's office filed a joint motion in D.C. Superior Court for approval of the deal. San Francisco-based DoorDash denied wrongdoing.

Racine's office in the 2019 lawsuit said that until it changed its policy in August of last year, DoorDash used tips paid by customers to offset the "guaranteed amount" it owed workers for each delivery. But on its mobile app and website, the AG said, DoorDash gave the impression that the tip would be added to workers' wages.

The settlement, if approved, would require DoorDash to pay $1.5 million to workers who made deliveries in Washington D.C. while the company's allegedly unlawful tipping policy was in place, $750,000 to the AG's office to cover the cost of investigating and litigating the matter, and $250,000 to local charities.

DoorDash also agreed to maintain a policy under which the entirety of tips from customers will go to delivery workers, and to clearly inform customers about how workers are paid. The company said that when customers check out, they will be provided with an itemized summary of payments to workers for each delivery they make, including base pay, tips, and any promotional payments.

DoorDash and its lawyers did not immediately respond to a request for comment. At the time the lawsuit was filed, the company said it had publicly disclosed how its previous pay model worked in 2017, and that the AG's claims had no merit.

Racine in a statement said: "Gig economy companies provide important and necessary services, especially during the pandemic. However, the law applies to these companies, just as it does to their brick and mortar counterparts."

The AG's office claimed in the lawsuit that DoorDash's payment model allowed it to significantly reduce its labor costs by using consumer tips to subsidize the company's share of workers' wages.

The AG accused DoorDash of engaging in deceptive and unfair trade practices in violation of D.C.'s Consumer Protection Procedures Act.

A DoorDash customer in New York filed a proposed statewide class action against the company in federal court in Brooklyn in July 2019 that made similar claims. A federal judge in August granted DoorDash's motion to send that case to individual arbitration.

Proposed class actions by DoorDash workers in California and Georgia over the company's tipping policy have also been sent to arbitration.

DoorDash last year announced that it would begin adding tips to workers' pay, following the lawsuits and several news articles highlighting its tipping practices.

The case is District of Columbia v. DoorDash Inc, Superior Court of the District of Columbia, No. 2019 CA 007626.

For District of Columbia: Benjamin Wiseman and Kathleen Konopka of the D.C. Attorney General's office

For DoorDash: Roy Austin of Harris Wiltshire & Grannis