The State of California has launched a legal battle against a Delaware-based corporation, alleging significant labor violations. The complaint was filed by San Francisco City Attorney David Chiu in the Superior Court of California, County of San Francisco, on December 12, 2024, targeting GigSmart, Inc. The case centers around allegations that GigSmart misclassified its workers to avoid providing them with employee benefits and protections.
According to the lawsuit, GigSmart operates as a staffing agency through its "Shift Gigs" program but classifies its workers as independent contractors rather than employees. This classification allegedly allows the company to bypass several California labor laws designed to protect workers' rights. The complaint asserts that GigSmart's business model unlawfully denies these workers the protections and benefits they are entitled to under state law, thereby gaining an unfair competitive advantage over other businesses.
City Attorney David Chiu argues that GigSmart's practices violate multiple sections of the California Business and Professions Code and Labor Code. Specifically, the complaint highlights violations of California's ABC test for employment classification, which stipulates that workers should be classified as employees unless they meet specific criteria proving their independence from the hiring entity. Chiu states that "Shift Workers are not free from the control and direction of GigSmart," emphasizing that these individuals perform work integral to GigSmart’s core business operations.
The lawsuit further accuses GigSmart of failing to pay overtime premiums, provide mandatory meal breaks, reimburse business expenses incurred by workers, or offer sick leave—all requirements for employees under California law. Additionally, it is alleged that GigSmart improperly deducts a "Trust & Safety Fee" from workers' wages for occupational accident insurance instead of providing standard worker’s compensation coverage.
The plaintiffs seek injunctive relief to prevent further misclassification of workers by GigSmart and restitution for affected individuals. They also request civil penalties up to $2,500 per violation and additional penalties for offenses against senior citizens or disabled persons. The goal is not only to rectify past wrongs but also to deter future violations by ensuring compliance with state labor laws.
Representing the People of California in this case are attorneys David Chiu, Yvonne R. Mere (Chief Deputy City Attorney), Matthew D. Goldberg (Chief Worker Protection Attorney), and Ian H. Eliasoph (Deputy City Attorney). The case is identified under Case No. CGC-24-620547 in the Superior Court of California.