Staffing company Instawork again violates wage laws thousands of times

Staffing company Instawork again violates wage laws thousands of times

Published on August 26, 2024

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DENVER - Instawork, and its alter ego Advantage Workforce Services, is facing a new wage theft determination after withholding information and shorting more than 3,500 workers the wages they earned.

Denver Labor, a division of the Denver Auditor's Office, has determined gig staffing company Instawork committed more than 20,000 violations of employees' basic wage and hour rights under the city's minimum wage and civil wage theft ordinances and now owes a total of $2,354,636.28 in restitution, penalties, and fines.

"Instawork has had numerous opportunities to do the right thing. Instead they withheld information we requested and stopped thousands of employees from receiving their rightful pay and sick leave according to the law," Denver Auditor Timothy M. O'Brien, CPA, said.

Since May, Denver Labor has been investigating Advantage Workforce Services, LLC, for wage and hour violations. We found they failed to pay Denver's minimum wage and overtime to hundreds of workers. It also routinely denied paid sick and safe leave to employees.

However, it turned Advantage Workforce Services is essentially the same company as Instawork, a company we determined broke Denver's wage laws thousands of times earlier this year by misclassifying nearly 3,000 people as independent contractors.

When employees are misclassified as independent contractors, they are denied critical workplace protections and frequently have their wages stolen.

According to the new determination, Instawork withheld an extraordinary amount of payroll data that we specifically requested in our first investigation. This missing information included documentation of more than 14,000 shifts for 1,450 employees. Instawork claimed these employees worked for Advantage Workforce Services, which we determined is not a separate company.

Instawork and Advantage Workforce Services are not, in any meaningful way, separate entities. Instawork fully owns and controls Advantage Workforce Services. They provide the same kind of labor, sometimes for the same clients, and subject employees to the same rules, requirements, and policies. All work gets performed through Instawork's app, and workers have a single profile and performance score.

"Gig workers can still be a company's employees if they do not have the functional independence of being in business for themselves," Auditor O'Brien said. "In this case, people working frontline jobs - around food, in warehouses, or in cleaning services across the city - deserve the wages they are legally entitled to and have earned."

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.

Furthermore, when staffing companies illegally misclassify and underpay their employees, they are undercutting fair competition and harming good employers in a decades-old industry throughout Denver.

"The staffing industry has been around for a long time, and its members shouldn't have to compete against a rival who profits from wage theft. The fact that Instawork uses an app doesn't change the basic principle that these people are employees entitled to legal wages, including overtime and paid sick and safe leave," Auditor O'Brien said.

Instawork will have the opportunity to appeal this determination before an independent hearing officer.

For additional violations that fall outside of Denver Labor's enforcement authority, we will be referring this case to our municipal, state, and federal partners.

Anybody who has questions, comments, or information about this determination may contact Denver Labor by e-mailing [email protected].

AUDITOR TIMOTHY O'BRIEN, CPA
Denver's Auditor

Denver Auditor's Office
201 W. Colfax Ave. #705 Denver, CO 80202
Email: [email protected]
Call: 720-913-5000
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