A gig-based staffing company will be required to pay thousands of dollars in restitution to its workers after failing to classify them as employees, San Francisco City Attorney David Chiu announced.
GigSmart is a Delaware-based company with offices in San Francisco that connects employers with workers to fill temporary shifts such as event staffing and general laborers. Workers are hired and paid directly through GigSmart.
However, the company previously classified its workers as independent contractors, not as employees who are ensured the full range of benefits and overtime premiums. Under California law, they are considered GigSmart employees.
Chiu secured a stipulated judgment against GigSmart in which the company will have to categorize its future workers as employees. To resolve the misclassification, GigSmart will pay $703,000 to its workers.
“Going forward, these employees will immediately be entitled to all state and local workplace protections and benefits, including overtime pay, paid sick leave, paid family leave, and workers’ compensation insurance, among others,” the City Attorney’s Office said in a news release.
GigSmart will also pay San Francisco $100,000 in civil penalties.
The City Attorney’s Office said the company was fully cooperative in reaching a resolution for the judgment.
GigSmart did not immediately respond to a request for comment Friday.
“Worker misclassification causes great harm to our communities and is unfair to businesses that play by the rules,” Chiu said in the press release. “GigSmart ultimately made the right choice here, and we hope others follow suit.”
The judgment is the third of its kind in San Francisco. Chiu reached similar agreements with staffing company Qwick in February 2024 and then a partial judgment with WorkWhile in December 2024.
Across these three cases, the City Attorney’s Office has secured nearly $4 million in relief for thousands of workers who were cheated out of receiving employee benefits from these companies.
“Misclassification cheats workers, responsible businesses, and taxpayers,” California Federation of Labor Unions president Lorena Gonzalez said in the press release. “This judgment sends a clear message to companies that profit from misclassification: labor law violators will be brought to justice.”
The post SF gig employment company ordered to pay $700K in restitution in misclassifying workers appeared first on Local News Matters.