WASHINGTON (DC News Now) — Shipt is a so-called “gig” company that offers shopping and delivery services to consumers through “shoppers” that pick and up bring the items to customers.
But DC Attorney General Karl Racine’s office is alleging it’s a company that is cheating its workers out of legal benefits.
The attorney general’s office filed a lawsuit this week against the Birmingham, Al., business, accusing it of fraud by misclassifying their workers to keep them from getting a minimum wage, paid sick leave and overtime, for example.
The lawsuit, which Shipt officials say is wrongly filed, could end up costing the company hundreds of thousands of dollars in penalties, AG officials say.
“The question really in this lawsuit and what we’re challenging is whether those workers are employees of Shipt or whether, as they argue, they’re independent contractors,” said Vikram Swaruup, the chief deputy attorney general. “And our lawsuit is really saying these workers are employees.”
Swaruup said the AG’s office believes these workers deserve to be treated like they are employees because they are central to the Shipt business in how it functions.
“The company has the power to hire and fire these folks, to control and supervise them, it controls how much they’re paid, it controls their wages and it’s core to how the company works,” he said. “And so it’s really important that they be treated as employees and be afforded all the protections that that entails. And those are things like minimum wage, overtime, sick leave, and then various taxes that are owed when you pay an employee.”
The Minnesota Attorney General’s office has also filed a similar suit against the company.
But a Shipt spokeswoman said in a statement that its workers know they are contractors.
“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 our platform,” she said. “We strongly disagree with the action taken by the attorney general for the District and we’ll continue advocating for shoppers and the opportunity to earn flexible income across the DC area.”