Gig-bases businesses watch in fear as cleaning startup company Homejoy closes up shop, due to a large pile of worker misclassification lawsuits.
Today’s economy is forcing people to take up all sorts of odd jobs and so gig-bases businesses have sprung abundantly as if over night. While these might seem like a good solution to a great many people who are out of a job and in desperate need of money, in too many cases they end up being scams.
While one salary is promised in the beginning, workers end up making a lot less at the end of the work day, because it is much easier for these companies to impose their views on their employees, however flawed they might be, when there is a weaker contract at the base of the collaboration.
Also, gig-based companies rarely provide insurance policies for their workers or other social benefits that should come with a proper workplace.
However, not all gig-based companies mistreat or disrespect their workers, but the reputation that has been built around them often leads to distrust from the public.
Whether this was the case of startup company Homejoy, it remains to be seen, but for the moment CEO Adora Cheung has made an official announcement that the company will be closing its doors due to “many unresolved challenges in the home services space”.
Homejoy was an app-based company that provided on-demand cleaning services for people at reasonable prices. Despite its success with the public, it looks like they will be unable to continue their activity, due to financial and legal problems that have been deemed unsolvable.
The main nail in Homejoy’s coffin was placed by J.C. Iglesias, who claimed that the companies cleaning staff members were misclassified in their contracts as independent contractors instead of employees. This misclassifications has cost Homejoy staff members their overtime pay and several other social benefits.
While an official ruling in this case has yet to be issued, Homejoy decided to cut its losses and shut down. Its workers are already being made offers from Homejoy’s main contender in the cleaning market, Handy, that is offering them sizable bonuses.
Other gig-based businesses should expect similar measures being taken against them, as authorities begin to close in on this widely spread matter.
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