From BuzzFeedNews, Caroline O’Donovan reports that Instacart settled a lawsuit in which workers alleged that they were improperly classified as independent contractors. Instacart agreed to pay $4.6 million but the workers will continue to be independent contractors. Caroline writes:
The Instacart workers who buy and deliver groceries just won a small victory — the grocery-on-demand startup just settled a class action lawsuit to the tune of $4.6 million.
The lawsuit alleged that workers were owed back pay because Instacart should have classified them as employees, not independent contractors; the payout, per Recode, will be as much as $5,000 for three workers named in the suit, while others will receive “a couple hundred dollars” at most, depending on a points-based system that ranks how much they worked. The settlement won’t, however, grant workers employee status.
“We have settled a nationwide class action lawsuit, primarily over the classification of our shoppers as independent contractors. This is a positive, early resolution for the Company, and we look forward to finalizing the settlement,” Instacart said in a statement.
In 2015, workers filed an initial suit against Instacart, claiming they had been misclassified as contractors, and were owed for the benefits and protections they would have earned as employees of the company. At the end of 2016, after the first case was moved to private arbitration, the same firm, Arns Law, refiled a second lawsuit, hoping to get the workers their day in court.
Since the first lawsuit was filed, Instacart has reconfigured its workforce, changing its in-store shoppers status to employees, while delivery workers remained contractors. But it has also repeatedlycut wages, and made it more difficult for customers to tip, which workers say has severely impacted their overall earnings.
Though Instacart workers will remain contractors under this settlement, they have won changes that might alleviate some of their concerns about tipping.