Platforms accused of taking a page from the 'Uber' playbook
A California-based hospitality staffing company has filed a lawsuit against several "gig economy platforms" alleging that they are engaged in unfair business practices by taking a page from the Uber playbook of classifying workers as independent contractors.
The Party Staff, Inc., said the misclassification of these platforms, namely Qwick, Instawork, and Tend, violates state labour laws and gives them an illegal competitive edge by reducing their operating costs.
According to the staffing company, the misclassification of the platforms' workers as independent contractors allows them to circumvent costly employer obligations, such as minimum wage and overtime pay, workers' compensation insurance, and payroll taxes.
"By misclassifying their workers as independent contractors rather than employees, Qwick, Tend, and Instawork have been able to save significantly on their labour costs, which in turn has allowed them to unlawfully undercut competitors, such as Plaintiff, who follow the law," read the complaint uploaded by Reuters.
"In many cases, Plaintiff's clients have explicitly informed Plaintiff that they would be terminating Plaintiff's services because Qwick, Instawork, or Tend could offer lower prices."
Meanwhile, the complaint also extends to major hospitality and food services companies such as Aramark and ISS Guckenheimer, who have been contracting Qwick, Instawork, and/or Tend for staffing.
"Aramark and ISS Guckenheimer thus act as joint employers of the misclassified workers and perpetuate the unfair competition suffered by Plaintiff," it read.
Boston-based lawyer Shannon Liss-Riordan, who represents The Party Staff, said the lawsuit is the first of its kind involving staffing firms.
"When companies misclassify workers, they make it very difficult for law-abiding companies to compete, and they drive an economic race to the bottom," Liss-Riordan told Reuters.
While the case is the first of its kind for staffing firms, gig economy players such as Uber have long been involved in disputes for classifying staff as contract workers.
In New Zealand, a landmark legislation decision there ruled last year that four Uber drivers were employees, making them entitled to benefits such as leave entitlements, holiday pay, as well as minimum wage.
In Singapore, the government recently recognised gig workers as a distinct labour class entitled to certain basic protections that are afforded to other regular employees.
