On Thursday, District of Columbia Attorney General Karl Racine filed suit against Shipt Inc. a delivery service company and Target Corporation subsidiary, for violations of several District labor laws, including minimum wage, overtime pay, and sick leave protections. The complaint alleges that Shipt misclassifies District residents as independent contractors to reduce labor costs despite the fact that its workers or “shoppers” have “all the hallmarks of employee status.”
Racine’s complaint, filed in the Superior Court of the District of Columbia, explains that Shipt is an Alabama corporation that provides consumers with shopping and delivery services with a focus on groceries and household merchandise. On its mobile app or website, customers buy things that shoppers purchase and deliver for them.
Reportedly, Shipt advertises to workers that they can be their own boss and work flexibly. After an initial vetting process and when shoppers sign up for a shift, they are matched with a customer order. Shipt then instructs them where to shop, which products to buy, and where to deliver. The defendant also uses an algorithm to determine shoppers’ per-order pay, the complaint notes.
Racine contends that “[t]he economic reality of Shipt’s relationship with its shoppers demonstrates the existence of an employer-employee relationship,” though the company classifies shoppers as independent contractors.
In support, the filing points to Shipt’s power to hire and fire its workers as well...
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