Wage theft violations by gig staffing companies that fail to provide legally required sick leave could force workers who serve food and drinks or clean hotel rooms to work when they are ill.
New determinations from Denver Labor, a division of the Denver Auditor’s Office, found that two staffing companies misclassified their workers as independent contractors. As a result, hundreds of workers were paid less than minimum wage and did not receive overtime pay, and thousands were denied the right to paid sick leave.
In total, these new wage theft determinations revealed more than 1,200 minimum wage violations, more than 700 overtime violations, and more than 13,500 paid sick leave violations. The wage theft determinations require the two companies involved to pay almost $280,000 in restitution to workers and more than $800,000 in fines.
“The pandemic showed us how crucial paid sick leave is for workplace safety,” Auditor Timothy O’Brien said. “But all over Denver, thousands of people who make and serve food can’t take time off when they’re sick — putting both workers and customers at risk.”
Gig work usually involves flexible or temporary work assignments performed by workers classified as independent contractors. However, even part-time or short-term workers are protected by Denver and Colorado law if they are actually employees.
The two companies, Instawork and Gigpro, are temporary staffing agencies that provide labor for clients in the hospitality and warehousing industries. Work included bartending, serving, dishwashing, general labor, and cleaning across the city.
Workers’ rights violations hurt all of us, especially when they’re so widespread.”
Denver Auditor Timothy O’Brien
Denver Labor found Instawork misclassified nearly 3,000 people as independent contractors and Gigpro misclassified about 90. Under Colorado law, these workers are employees of Instawork and Gigpro because they work for the agencies’ benefit, perform the primary work of the companies, and the agencies have detailed rules and policies for conduct.
“In the modern gig economy, issues like this are common,” Auditor O’Brien said. “Under Denver’s wage theft protections, we are able to help workers access the resources, benefits, and wages they have earned.”
Due to the terms of their employment, the workers in these cases do not have the option to take their cases to court and cannot join a class action lawsuit. That’s why it’s important for authorized government agencies to enforce the law and ensure all workers — regardless of occupation or income level — have access to justice.
When employees are misclassified as independent contractors, they are denied critical workplace protections and frequently have their wages stolen. They often suffer minimum wage and overtime violations, can’t take paid rest breaks, and don’t receive paid sick leave. If they get injured, they can’t take advantage of workers’ compensation. If they lose their jobs, they aren’t protected by unemployment insurance.
“Workers’ rights violations hurt all of us, especially when they’re so widespread,” Auditor O’Brien said. “Our decisions today ensure we’re following through on the intent of the law to protect families and communities from the harms of wage theft.”
Among the groups most vulnerable to wage theft are undocumented workers, migrants, people of color, and women. Denver’s wage protections help ensure these individuals and others are not exploited by employers, and help get workers every dollar they earned.
Independent contractor misclassification impacts our whole community. Not only can it harm individuals of any income level, it allows some employers to avoid paying taxes to support programs like unemployment insurance, Social Security, and Medicare. And it unfairly harms high-road employers who do pay their employees and their taxes, but who cannot compete against those who cut corners.
“Thousands of Denver employers work hard to follow the law and pay their employees what they earned,” Auditor O’Brien said. “They shouldn’t be undercut by competitors who save money by denying their employees basic rights. My office will always work to protect good faith employers.”
As part of due process, these companies will have the opportunity to appeal.
More Information:
Read the determination – Instawork
Read the determination – Gigpro
Read more restitution stories and case results
You can find more information about the Auditor and Denver Labor here.
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