Is Employee Misclassification Becoming Popular Among Startups?

If you filter through your social media profiles, sometimes you will stumble across advertisements for startups that offer services for transportation, home repair and cleaning. glass globe

In some circumstances, these companies are employing people illegally, classifying workers as independent contractors to avoid paying them overtime, while also not offering benefits.

In a recent case, two people filed a lawsuit against Handy, a company that provides on-demand house cleaning and home repair services. According to the lawsuit, which is seeking class action status, Handy is deliberately misclassifying workers in an attempt to withhold benefits and pay.

The workers also claim that Handy is not paying minimum wages, not giving workers meal and rest periods as well as not providing overtime pay. The plaintiffs claim that they are employees who are required to wear uniforms and told how to interact with each customer, thus they should not be classified as contractors.

Handy was known as Handybook until September 2014, when it renamed itself to appear as a startup. Business Insider reported that each of Handy’s California-based cleaners could be awarded up to $4,000 if the lawsuit is settled in favor of the plaintiffs.

Should I Contact an Attorney If My Employer Misclassifies Me?

It appears as though employee misclassification is becoming more popular among online startups, as lawsuits have been filed against companies like Handy, Lyft and Uber. New York Magazine recently had a long form story about this trend, which it dubbed the “1099 economy”. You can read about it by clicking here.

Along with this movement, there have been several wage and overtime lawsuits filed against transportation companies, who promote similar practices in an attempt to save money. To read more about these cases, you can browse through our blog.

You should not be subjected to unfair labor practices because your employer wants to save money. Contact us today if you believe you are owed back wages or if you believe that your position has been misclassified.

Kesluk, Silverstein & JacobLos Angeles employment attorneys