Bay Area/ San Francisco
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Published on January 17, 2025
San Francisco City Attorney Wins $703K Settlement for Misclassified Workers as GigSmart Agrees to ReclassificationSource: Google Street View

San Francisco City Attorney David Chiu has clinched a third substantial legal win for workers against temporary staffing company GigSmart, resulting in substantial payments to misclassified workers. As per the stipulated judgment, made official by the San Francisco Superior Court, the company has agreed to reclassify its gig workers as employees. It must now furnish them with the full spectrum of employee benefits and rights, such as overtime, sick leave, and workers' compensation insurance. GigSmart agreed to resolve the issue swiftly upon being notified of their misdemeanors, which involved misclassifying their gig workers as independent contractors, an illegal practice under California law.

Under the judgment and injunction approved yesterday, GigSmart will disburse $703,000 to its California workers in restitution and secure a commitment to staff future shifts only with employees. According to the City Attorney's office's announcement, this recategorization will immediately entitle the workers to state and local workplace protections and benefits. Along with ensuring workers' fair treatment, GigSmart is set to pay the City $100,000 in civil penalties.

Chiu, who has been a formidable force in addressing worker misclassification, highlighted the cooperative stance of GigSmart in the investigation, which paved the way for a prompt solution. "We appreciate GigSmart's willingness to come to the table early to find a solution that reclassifies these workers and provides them fair restitution," Chiu said, per the City Attorney's Office press release. This resolution, marking the third of its kind for Chiu's office, brings the cumulative relief secured to over $3.9 million across multiple companies, assuring a fairer playing field in the temporary staffing sector.

Praise for this decisive action came from Lorena Gonzalez, the President of the California Federation of Labor Unions, who said, as cited by the City Attorney's Office, "Misclassification cheats workers, responsible businesses, and taxpayers. This judgment sends a clear message to companies that profit from misclassification: labor law violators will be brought to justice." Chiu's esteemed Worker Protection Team, established in 2022 and led by a team of dedicated legal professionals, spearheaded the case to safeguard workers' rights by tackling systemic business practices that exploit those in marginalized positions.