Contractor or Employee? Silicon Valley’s Branding Dilemma


From Forbes

Handy, a startup that lets users book cleaners and handymen, hires its workers as independent contractors. But according to a lawsuit filed by two former cleaners last month, the startup takes a very liberal interpretation of “independent,” dictating what its cleaners wear, how they clean, and what they say, down to a parting “Thanks for using Handy!” That level of control, the suit claims, means the workers have been misclassified as employees and are owed employee benefits — overtime pay, business expenses, and more.

It’s the latest in a string of misclassification lawsuits aimed at startups that allegedly exploit the independent contractor model to save on labor costs. Handy, like any company, wants to sell a consistent, branded product — in this case, a cleaner in a Handy uniform that shows up and cleans in a particular way. Handy, like almost every startup, hires independent contractors to do its work and gives specific training on how to do it. But IRS regulations forbid companies from controlling how independent contractors do their jobs, and workers are starting to show they’re not afraid to sue. (A Handy spokesman said the company provides but does not require uniforms, and encourages but does not require certain behaviors in its cleaners.)

The Handy lawsuit is a perfect example of Silicon Valley’s newest dilemma: Startups that deliver real-world services through an app want the product to be great every time. But controlling people as tightly as most apps control pixels is landing the startups in court. How best to toe the line?….”

Read the full story at Contractor or Employee? Silicon Valley’s Branding Dilemma.

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