Agreement requires gig company to pay back thousands of California workers for stolen wages and reclassify these workers as employees
SAN FRANCISCO (December 17, 2024) — San Francisco City Attorney David Chiu announced today that he has reached a settlement agreement with WorkWhile, a gig staffing company, that requires the company to pay $1 million in restitution to its non-delivery workers and convert these workers to employees, ensuring they receive the full range of employee benefits and protections.
In June 2024, Chiu sued WorkWhile for depriving its gig workers—including those performing warehouse, hospitality and food service, delivery, and food production work—of critical employment protections by misclassifying them as independent contractors instead of employees.
The stipulated partial judgment and injunction, approved by the San Francisco Superior Court on December 10, requires WorkWhile to pay its California non-driver workers $1 million in restitution and ensures that, moving forward, all non-driving shifts are staffed by employees. These employees will be entitled to the full range of workplace protections and benefits, including overtime pay, paid sick leave, paid family leave, and workers’ compensation insurance. This agreement resolves the case with respect to non-delivery workers, and Chiu will continue to litigate the case regarding WorkWhile’s delivery workers.
In February 2024, City Attorney Chiu secured the first injunction in California requiring a gig economy staffing company, Qwick, to permanently reclassify thousands of workers. This new agreement with WorkWhile—the second of its kind—builds on the City Attorney’s earlier work and further ensures a level playing field for law-abiding competitors in the staffing industry.
“This agreement is part of our ongoing, groundbreaking work to fight misclassification and prevent these gig app misclassification models from taking root,” said City Attorney Chiu. “We will not tolerate companies denying workers their rights and benefits, or even worse, attempting to shift the costs onto the workers. We are proud that this mistreatment will come to a stop and that thousands of California workers will have their stolen wages returned to them.”
“California workers deserve fast and effective enforcement when corporations cheat them out of wages, benefits and basic labor protections through misclassification,” said Lorena Gonzalez, President of the California Labor Federation. “We commend City Attorney David Chiu for leading the charge against worker misclassification and holding abusive companies accountable. Today’s settlement is incredibly important because it is not just monetary, it will also bring permanent changes to the business structure to ensure workers are treated as employees going forward.”
“This case is a great example of the important role city leaders can play in standing up for workers’ rights—a role that will become even more critical in the years to come,” said Terri Gerstein, Director of the NYU Wagner Labor Initiative at NYU’s Robert F. Wagner Graduate School of Public Service. “This far-reaching result is especially noteworthy because it requires WorkWhile to change its unlawful business model statewide, thereby providing the full range of employment rights and protections to its workers throughout California. Other cities and states should follow up on this case.”
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 app, WorkWhile provides client businesses with workers, hired and paid by WorkWhile directly, to fill empty shifts. WorkWhile fills shifts in many different industries, including warehouse, hospitality and food service, delivery, food production, event service, and general labor. WorkWhile’s gig workers often work alongside and perform the same functions as employees at the client businesses.
In violation of California law, WorkWhile has classified and treated these workers as independent contractors, as though they each operated an independent business as a sole proprietor. As a result of this misclassification, these workers have been denied a wide range of state and local employee rights, including the right to overtime pay, paid sick leave, paid family leave, health and safety protections, and anti-retaliation protections, among others.
WorkWhile also did not provide legally-required workers’ compensation insurance coverage, but instead charged its workers a “Trust & Safety Fee,” which funded a substandard insurance-like product, shifting the cost of a workers’ compensation-type protection from the employer to its low-wage workers.
In June 2024, the City Attorney’s Worker Protection Team filed a lawsuit to stop to these practices and recover restitution for workers who had been harmed. The lawsuit alleged that the misclassification of WorkWhile’s workforce violated a host of state and local labor laws and denied workers the protections, wages, and benefits guaranteed under law. In doing so, the City alleged WorkWhile gained an unfair business advantage over other law-abiding businesses, constituting a violation of California’s Unfair Competition Law.
Under the stipulated partial judgment and permanent injunction approved last week, WorkWhile must treat all of its existing and future California non-driver workers as employees rather than independent contractors. WorkWhile will also pay thousands of its gig workers a total of $1 million to remedy WorkWhile’s unlawful wage deductions and WorkWhile’s failure to pay overtime premiums and provide paid sick leave. Going forward, in accordance with California law, WorkWhile will be obligated to treat these workers as employees. As a result, these workers will be paid their overtime premiums, will earn accrued sick leave, and will no longer pay fees for insurance-like products. The agreement represents a partial judgment benefiting thousands of non-driver workers while the misclassification of drivers continues to be litigated.
Any unclaimed restitution will be paid to the City in civil penalties and used for the enforcement of consumer and worker protection laws. The judgment provides that the City Attorney’s Office will actively monitor WorkWhile’s compliance with the agreement through January 1, 2027, and the Court will retain permanent jurisdiction over WorkWhile’s obligation to treat its workers as employees.
This case is prosecuted by the Office’s Worker Protection Team, established by City Attorney Chiu in 2022. It is staffed and supported by Ian Eliasoph, Hannah Giorgi, Matthew Goldberg, Bianca Rojo, and Chris Manitsoudis. The Team’s mission is to protect the rights of workers in San Francisco and California with an emphasis on combating systemic business practices that exploit marginalized workers. Building on the Office’s longstanding leadership in affirmative litigation, the Team investigates and litigates instances of wage theft, employee misclassification, and other abusive workplace practices.
The case is People of the State of California v. WorkWhile, et al, San Francisco Superior Court, Case No. CGC-24-615401. The Partial Judgment and Injunction can be found here.
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