Shipt, a Target-owned delivery company, is facing a lawsuit from the Minnesota Attorney General over claims that they are intentionally misclassifying employees as independent contractors in order to avoid paying certain benefits, like workers’ compensation.
Two similar lawsuits are being brought against Shipt, one by the Attorney General in Minnesota and one by the Attorney General in Washington D.C. In the Minnesota lawsuit, Attorney General Keith Ellison claims that Shipt’s intentional misclassification of workers blocks employees from a number of worker protections, including:
- Workers’ Compensation
- Minimum Wage
- Sick And Safe Time
- Unemployment Insurance
“Many workers work for gig-economy companies because they like the flexible schedule that the work provides. Companies like Shipt suggest that being an independent contractor is a necessary tradeoff for having a flexible work schedule, but that simply is not true,” said Attorney General Keith Ellison in a statement.
The Minnesota lawsuit is seeking civil penalties of up to $25,000 and worker back pay, among other reliefs.
Shipt responded to the lawsuit, arguing that the independent contractor classifications actually benefits workers.
“Shoppers with Shipt are independent contractors, and the flexibility that comes with being an independent contractor is the primary reason Shipt Shoppers choose to earn on our platform,” the company said in a statement.
Interestingly, the Department of Labor recently proposed a rule that attempts to make it harder for employers to misclassify their employees in order to avoid paying certain benefits. Moreover, Instacart, which provides a similar personal shopper-styled service, recently agreed to a $46.5 million settlement to a 2019 lawsuit that alleged employee misclassification, so it seems that agencies are working to crack down on employee misclassification and abuse.
We’ll keep an eye on the lawsuit as it progresses, but for now, if you’ve performed gig work and are wondering if you’ve been shortchanged when it comes to pay or benefits, reach out to an employment and injury law firm like Hey Workers. We can ensure that you are classified correctly and have access to all the benefits that come with employment. For more information, or to talk to a lawyer about your options, give our team a call today at (844) 439-9675.