The proposed class-action lawsuit was filed by two of Handy’s California-based independent contractors. The workers allege that Handy — just one of many companies like Lyft, Uber, and Postmates that hire independent contractors instead of employees — is deliberately misclassifying its employees as independent contractors.
The difference between the two, according to the IRS, is that for common-law employees, employers “must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid.” The same is not necessarily true for an independent contractor. In addition, benefits are often extended to employees but not independent contractors, and employers have the right to control how a worker behaves — how to dress, for example, or specific customer interaction protocol — when they’re an employee and not an independent contractor. You have more labour protections when you’re an employee.
As Valleywag’s Kevin Montgomery points out, Handy has extremely specific requirements for its workers, which may indicate that Handy workers should be classified as employees instead of independent contractors. The lawsuit alleges that Handy requires its cleaners to wear uniforms, tells its cleaners specifically how to interact with the customer at all times, and tells cleaners when they can use the bathroom in a home they’re cleaning or listen to music.
The lawsuit also alleges Handy has refused its cleaners minimum wages, meal and rest periods, and overtime pay. Each of Handy’s California-based cleaners could be awarded up to $US4,000, if the lawsuit is settled in favour of the cleaners.
Handy was known as Handybook until September, when it rebranded to become a startup focused on home services. The company has raised $US45.7 million from investors like BoxGroup, General Catalyst Partners, David Tisch, Highland Capital Partners, and Revolution LLC.
These are the labour violations the two Handy cleaners allege the company has committed:
Handy violates California law by misclassifying Cleaners as independent contractors when they are, in fact, employees. Due to this unlawful misclassification of Cleaners, Handy has violated numerous provisions of the California Labour Code, including failure to compensate Class Members for all overtime hours worked despite the fact that Plaintiffs and Class Members regularly work overtime, failure to pay a minimum wage for all hours worked, failure to provide meal and rest periods, failure to pay all earned wages at the conclusion of employment, failure to adequately reimburse Class Members for business expenditures incurred and required by their jobs, failure to remit gratuities to Class Members, and failure to furnish timely statements accurately showing, among other things, the total hours Class Members worked during each pay period.
We have reached out to Handy for comment, and will update this post if the company responds.
The full lawsuit is below, courtesy of Valleywag: