Shipt sued by DC over classification of workers. The company has been accused by the attorney general of DC of misclassifying workers as independent contractors and then denying them the benefits that they are owed.
Shipt Sued By DC over Classification of Workers
The District of Columbia is suing Shipt, a same-day delivery company for allegedly denying its full-time workers their wages and benefits. The lawsuit, which was filed on Oct. 24, alleges that Shipt misclassifies its workers as independent contractors instead of employees, thereby avoiding the obligations on minimum wage, overtime, and as well as paid sick leave.
DC attorney general Karl A. Racine on Thursday said that classifying workers as independent contractors also means that Shipt does not provide payroll taxes which would normally go towards paid family leave and compensation of workers.
What the DC Attorney Has To Say About the Development
“Increasingly, we’re seeing companies abuse hard-working District residents by fraudulently calling them independent contractors and, as a result, denying them wages and benefits they are legally owed,” Racine in a statement said.
Shipt generally provides the services of same-day delivery from a host of nationwide stores such as Target, Costco, Sephora, CVS, and Walgreens. In 2017, the company was acquired by Target for $550 million. The delivery drivers of Shipt are known as Shoppers.
What Shipt Has To Say About the Lawsuit
“The flexibility that comes with being an independent contractor is the primary reason Shipt Shoppers choose to earn on our platform,” Evangeline George, a spokesperson from Shipt in an emailed statement revealed to CNET. “We strongly disagree with the action taken by the Attorney General for the District, and we’ll continue advocating for Shoppers and the opportunity to earn flexible income across the DC area.”
The argument as to whether gig workers are classified are contractors or as employees have plagued the industry for many years now and in that time led to laws, lawsuits, and even election propositions.
Public’s Stance on Gig Workers
And the Biden administration earlier this month released a proposal that could now make it easier for courts to reclassify gig workers at companies such as Lyft, Uber, and DoorDash as employees.
“While independent contractors have an important role in our economy, we have seen in many cases that employers misclassify their employees as independent contractors, particularly among our nation’s most vulnerable workers,” Marty Walsh, Secretary of Labor on October 11 said.
The federal trade commission back in September also clarified its own policies for the gig company in a bid to protect gig workers from “unfair, deceptive and anticompetitive practices.”