San Francisco City Attorney Sues Staffing Company for Misclassifying Workers

The City Attorney of San Francisco announced a lawsuit against a staffing firm for misclassifying workers, includng warehouse, hospitality, food service, event service and general labor workers, as independent contrators.

SAN FRANCISCO (June 14, 2024) — City Attorney David Chiu announced today that he has filed a lawsuit against WorkWhile, a temporary staffing firm, for illegally misclassifying its workers and denying them guaranteed protections, wages, and benefits. The lawsuit, brought on behalf of the People of the State of California, alleges WorkWhile’s model of treating its workers—including warehouse, hospitality and food service, last-mile delivery, food production, event service, and general labor—as independent contractors is illegal and has dire consequences for workers, law-abiding competing businesses, and the broader public.

“Misclassification remains one of the most insidious types of worker exploitation,” said City Attorney Chiu. “WorkWhile’s practice of misclassification violates labor and employment laws across a shocking number of industries. To add insult to injury, WorkWhile has the infrastructure to appropriately classify its workers, but chooses to deny its workers their rights and benefits. The company engages in systemic wage theft and brazenly shifts the costs of guaranteed employee protections onto their workers. We will continue to root out these practices and ensure workers are treated fairly under the law.”

“California passed the strongest law in the nation to stop worker misclassification, but laws cannot change employer practices unless there is enforcement,” said Lorena Gonzalez Fletcher, principal officer of the California Labor Federation and author of Assembly Bill 5. “The San Francisco City Attorney’s office is sending a clear message to law-breaking companies that worker misclassification will not be tolerated. Staffing companies have always been employers, using an app doesn’t change that. With today’s lawsuit against WorkWhile, City Attorney David Chiu is enforcing AB 5 and seeking injunctive relief to stop the company’s illegal practices. This kind of enforcement makes labor laws meaningful and life changing for workers.”

“When gig workers are denied the basics of workers’ compensation, overtime and minimum wage, society often picks up the bill,” said Kim Tavaglione, Executive Director of the San Francisco Labor Council. “We have fought hard for these rights and protections, and we must ensure a level playing field where every employer plays by the rules. The San Francisco Labor Council applauds the City Attorney for defending workers’ rights and our greater society.”

Background
WorkWhile is a San Francisco-based temporary staffing company. In the five years since its founding, WorkWhile has grown rapidly, with half a million workers operating in 40 major metropolitan areas across 27 states.

Through its online platform, WorkWhile provides client businesses with workers to fill empty shifts, and then WorkWhile pays those workers directly. WorkWhile workers fill shifts in many different industries, including warehouse, hospitality and food service, last-mile delivery, food production, event service, and general labor. When WorkWhile workers fill a shift, they often work alongside and perform the same functions as employees at the client businesses.

WorkWhile treats its workers as independent contractors, but they are WorkWhile employees by every legal standard under California law. WorkWhile vets these workers, monitors their performance, controls which shifts workers are eligible for, tracks their location, and blocks workers from their app if they do not adhere to WorkWhile’s strict attendance policy.

As a result of this misclassification, WorkWhile’s workers are not provided overtime, required meal breaks, health expenditures, reimbursement for expenses including expenses associated with driving a personal vehicle, or any type of paid leave guaranteed by state and local laws.

WorkWhile also does not provide legally-required workers’ compensation insurance coverage, but instead boldly charges its workers a “Trust & Safety Fee” of 54 cents per hour for route delivery shifts and 47 cents per hour for all other shifts. This funds a substandard insurance-like product, shifting the cost of a workers’ compensation-type protection from the employer onto low-wage workers.

The People allege that WorkWhile’s misclassification of its workers violates a host of state and local labor laws and denies workers the protections, wages, and benefits guaranteed under law. In doing so, WorkWhile has gained an unfair business advantage over other law-abiding businesses, constituting a violation of California’s Unfair Competition Law. The lawsuit seeks to stop to these practices and recover civil penalties, fees, and restitution for workers who have been harmed.

It is entirely possible to legally provide temporary staffing to businesses in the warehouse, route delivery, event, and hospitality industries. Many temporary staffing agencies do so legally by designating their workers as employees. In fact, WorkWhile itself provides “W-2 shifts” to a subset of its shift workers.

Current or former WorkWhile workers are encouraged to share relevant information with the City Attorney’s Office by emailing WorkWhileWorkers@sfcityatty.org.

The case is People of the State of California v. WorkWhile, et al, San Francisco Superior Court. The complaint can be found here.

The San Francisco City Attorney’s Worker Protection Team
In 2022, City Attorney David Chiu established the Office’s Worker Protection Team to expand and build upon the Office’s longstanding commitment to protecting the rights of San Francisco and California workers. The Team investigates and litigates instances of wage theft, employee misclassification, and other abusive workplace practices.

This lawsuit against WorkWhile builds upon the Office’s track record in combatting worker misclassification. In February 2024, the City Attorney’s Office reached a groundbreaking $2.1 million settlement agreement with hospitality-staffing company Qwick that required the company to convert all of its misclassified California workers to employees. The Office is also actively litigating a misclassification case against Uber and Lyft in this area. And, following investigations by the San Francisco Office of Labor Standards Enforcement, the City Attorney’s Office secured multi-million dollar settlements benefitting DoorDash and Instacart workers.

Source: City Attorney Chiu sues staffing company for misclassifying workers – City Attorney of San Francisco

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