Do Startups Often Commit Labor Law Violations?

Last fall, our own Douglas N. Silverstein wrote an editorial for the Los Angeles Daily Journal that discussed how many startups in California were susceptible to labor issues. Photo of employee handbook

Unfortunately, as attorney Silverstein put it, “[S]tartups often have a very informal culture with a younger workforce who has not been schooled in the many legal requirements of workplace etiquette.” This is especially true when it comes to wage/hour law compliance, where many startups seem to have ongoing issues.

In many employment lawsuits, startups have been accused of employing people illegally by classifying workers as independent contractors to avoid paying them overtime and minimum wages. Just last week in our blog, we discussed how two separate class action lawsuits against Uber and Lyft would go to trial soon over allegations of employee misclassification.

Remember, many service providers have been accused of misclassifying workers as a way to cut costs. This seems to be becoming increasingly common in the startup industry, where application and technology advancements have made providing services easier to the public.

Homejoy Hit with Labor Lawsuits

We bring this issue up because Homejoy, a San Francisco home cleaning startup, was accused in two recent lawsuits of failing to pay its workers minimum wages and misclassifying them as independent contractors.

According to the San Francisco Business Times, one of the lawsuits accuses the company of employee misclassification and seeks class action status. The other lawsuit accuses the company of failing to pay workers minimum wages and overtime and requiring workers to pay their own business-related expenses.

Homejoy did not comment when asked about the lawsuit, according to the Times.

Speaking to an Attorney About an Internship

If you believe that your employment status is misclassified, it may be in your best interest to speak to an attorney. You may be entitled to back wages and damages. An experienced attorney can determine if your employment situation is legal. All companies, regardless of whether they are startups or not, must follow the same labor laws and guidelines.

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Kesluk, Silverstein & Jacob—Los Angeles employment attorneys


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