Handy, the on-demand "handyman" and house cleaning startup, is facing a class action lawsuit for violating an impressive amount of labor laws. The suit alleges that the company refuses workers minimum wages, paid breaks, overtime pay, and withholds tips, amongst other violations. Workers also claim the startup, which has raised $45.7 million in funding, imposes onerous demands on workers, including instructing them on "how to use the bathroom."
The crux of the suit (embedded below) is that Handy uses independent contractors instead of employees—a popular tactic amongst startups like Uber, Lyft, Homejoy, SpoonRocket, Taskrabbit, and Postmates. The freelance model allows startups to drive down labor costs and spend millions on marketing cheap deals while they try to grow, grow, grow. That growth, however, comes at a steep cost for workers: contractors are denied labor protections, health insurance, worker's compensation, and they can be fired on a moments notice without unemployment insurance. In Handy's case, it has allegedly driven compensation below minimum wage.
The lawsuit, filed in a California court by two former Handy house cleaners, says the startup is deliberately misclassifying employees as independent contractors. It's alleged the company exerts significant control over workers, which the complaint claims is sufficient proof that Handy's contractors should be classified as employees.
Some of the requirements Handy imposes on workers includes fixing service prices, tellings workers how the cleanings must be performed, and instructing them as to what cleaning products they must use. Workers are also required to wear a Handy uniform, and the company even tells them when they're allowed to listen to music and go to the bathroom:
Because of the alleged misclassification, the plaintiffs are seeking damages up to $4,000 for each one of Handy's California-based workers for violating labor protection laws:
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 Labor 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.
When I reached out to Handy for comment, their press person seemed unaware of the filing and asked me to send them a copy of the suit.
Last month, Handy made headlines after a former job applicant chronicled her hellish trial day at the company's New York City headquarters. Her account exposed a corporate culture filled with sexism and racist jokes made at their house cleaner's expense.
Update: A Handy spokesperson dismissed the lawsuit as being "without merit" in a statement sent to Valleywag:
Professionals who use the Handy platform to book jobs are independent contractors, not Handy employees. They choose the Handy platform because it provides much needed flexibility by allowing them to book whatever jobs best suit them. Moreover, on average, professionals earn more than $18 an hour for each job booked on the platform, far above minimum wage. The lawsuits filed by Vilma & Greta Zenelaj, as well as Lulu Malone, are without merit and we intend to defend them vigorously.