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Wage investigation leads to gig app company policy overhaul

MORE THAN 700 TEMPORARY WORKERS WILL RECEIVE BENEFITS

the Auditor at your service

Timothy M. O’Brien, CPA, Auditor of Denver

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Many workers use gig app companies to find various types of work and for different lengths of employment. Businesses also use these gig app companies to obtain labor on a flexible basis. My Denver Labor team conducted an investigation into a gig app company based in Denver called GigSmart.

As a result, the company returned more than $27,000 to employees and made significant changes to better protect workers and employers using their service. This change is expected to help more than 700 workers this year alone, who will be classified as employees rather than independent contractors.

Many gig app companies do not provide worker benefits such as paid time off, overtime, or workers’ compensation insurance, and often neither does the hiring business. When Denver Labor proactively contacted GigSmart, their executive team insisted they did not want wage theft happening with their contracted companies. They provided lots of data and records, demonstrating a good faith effort toward compliance with employment laws.

Working with GigSmart, Denver Labor ultimately identified more than $22,000 in possible wage violations, which the company agreed to return to workers, with interest of about $4,500.

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Changing their business model

Also during our investigation, GigSmart recognized the need to make changes to its business model statewide. Gig app companies often classify its workers as independent contractors, who are not entitled to minimum wage, overtime, paid sick leave, and other workplace rights and benefits. Independent contractors are frequently misclassified for their work and are in turn underpaid.

Misclassification puts gig app companies and their clients at risk for liability. After meeting with Denver Labor, GigSmart made the decision that starting April 2025, all shifts in Colorado posted on GigSmart will be completed by W-2 employees. Meaning, people looking for work through GigSmart are employees, not independent contractors.

They will be guaranteed important workplace protections like the right to be paid at least minimum wage, earn overtime, and accrue paid sick and safe leave. They will also pay less in taxes, have access to workers’ compensation insurance if they get injured on the job, and be protected by unemployment insurance if they lose their job.

I applaud GigSmart for being a leader in the gig app industry and taking the right steps to prevent wage theft. My team of analysts at Denver Labor will continue protecting workers in the city and encourage businesses to comply with the law.