2022 in Review: Major Worker Misclassification Settlements

Another year of astounding misclassification lawsuits has transpired (with one settlement even hitting the 9-figure mark). Here’s a look at the some of the most costly lawsuits that went down this year in an attempt to bring to light how increasingly problematic misclassification is for businesses, platforms, and workers all over the world. We’ll also explain how HR technology is advancing rapidly to make it easier for companies to drive toward a brighter Future of Work.

Uber Agrees to Pay $100 Million (New Jersey)

Uber and New Jersey reached an agreement in which Uber will pay $100 million to the state due to a disagreement over whether Uber drivers are considered employees or contractors. New Jersey demanded that the gig economy legend, Uber, pay back taxes, claiming drivers were misclassified as independent contractors. The case is founded on “an audit by the state’s Department of Labor and Workforce Development”. Read the full story from The New York Times.

Uber Agrees to Pay $8.4 Million (California)

Uber has also agreed to pay $8.4 million to settle a class-action lawsuit with California drivers (within certain timeframes) who sued for being wrongly classified as independent contractors instead of as employees. “Independent contractor issues have been in the news for several years, but we are seeing more cases being filed…it’s becoming more and more difficult to avoid liability for misclassification claims,” says Jennifer Shaw of Shaw Law Group. Read the full story from SHRM.

Instacart Agrees to Pay $46.5 Million

Instacart has agreed to pay $46.5 million in order to settle a 2019 lawsuit brought against the company by the City of San Diego, despite the fact that they admit to no wrongdoing and claim they have always properly classified shoppers. The lawsuit claimed that Instacart had misclassified its workers as independent contractors instead of employees. Read the full story on Grocery Dive.

Rover Group Agrees to Pay $18 Million

The Rover Group will pay $18 million in a worker misclassification settlement. Dog walking, ride sharing driver, engineering… hiring a worker through a talent marketplace doesn’t make the freelancer an independent contractor. That mistake cost Rover Group $18 million. All gig economy companies should be paying attention. Read the full story on MarketWatch here.

Universal Logistics Agrees to Pay Millions

Universal Logistics has agreed to reopen one of it’s closed locations in California and pay millions of dollars in back wages. Universal has agreed to no longer misclassify drivers as independent contractors, bringing them into compliance with California’s AB5. This decision comes after the Supreme Court denied challenges to the recent law which classifies certain independent contractors as employees. Read the full story from Transport Dive.

What Can Be Done to Mitigate Risk?

In order to avoid misclassification issues, it is important for HR leaders to stay up-to-date on the latest labor laws. This can be a daunting task, but a compliance partner or EOR like GreenLight who works with top labor lawyers can update classification in real time as these laws can and do change quickly.

We’re classification experts who rigorously update and maintain our systems in compliance with the most recent laws, mandates, and court rulings. Our AI determines the correct worker classification and your workers either become employees of GreenLight or we hire them as an approved contractor. Either way, you get any worker you want from almost anywhere in the world without having to worry about misclassification lawsuits.

Schedule a demo today so you can feel confident and prepared for the Future of Work.

If you found this resource helpful, help us out by sharing it on your favorite platform:
Alex Steeno

Alex Steeno

Senior industry analyst, adviser of multiple hypergrowth agencies, SaaS, and tech-enabled service platforms, Alex Steeno regularly contributes insights related to industry trends, growth marketing, and management consulting.

Industry insights, straight to your inbox.

Enter your email and you’ll be the first in the know when we publish new insights.

Ready to get started with GreenLight?

Mastering the management of today’s 50 million freelancers and contractors is no simple task. That’s why we created GreenLight.

We’re human-cloud experts that build solutions designed for the freelance economy. We take the complexity out of managing contract workers so you can make the gig economy work for you.

Connect with us on LinkedIn

Stay in the loop as we share exciting company updates, industry trends, upcoming webinars, partnerships, and more.