The San Francisco city attorney’s office on Thursday evening filed a lawsuit against WorkWhile, a five-year-old San Francisco-based temporary staffing company that has denied its workers employee benefits by classifying them as independent contractors.

“Misclassification remains one of the most insidious types of worker exploitation,” said City Attorney David Chiu, who announced the lawsuit today. “WorkWhile’s practice of misclassification violates labor and employment laws across a shocking number of industries.”

The thousands of workers placed in jobs via WorkWhile get paid for low-wage hourly work that doesn’t require a high level of specialized skills. The positions include a multitude of jobs including, inventory scanner, delivery driver, package handler and cleaning staff. “Members earning as much as $25/hr” boasts the company’s app, which notes that last month’s highest-earning member earned $4,039.

The city attorney’s office holds that the workers should be treated as employees under the legal standard of California law, including Assembly Bill 5, which in 2020 established a three-part test to help determine whether a worker should be classified as an independent contractor or an employee.

The first part of the three-part test requires that, to be classified as an independent contractor, the worker should be “free from the control and direction of the hiring entity in connection with the performance of the work.”

WorkWhile hires, monitors and terminates staff and sends them to clients on a shift-by-shift basis. Meanwhile, WorkWhile’s workers are incapable of negotiating their hourly wages or other compensation, the duration of their shift, or job duties. They also cannot choose which client is offered to them.

WorkWhile did not respond to a Friday morning request for comment. This article will be updated if and when it does.

The employees of some of WorkWhile’s clients perform essentially the same type of work as the independent contractors WorkWhile sends, according to the complaint . In some cases, WorkWhile even advertises that its clients should use these independent contractors to “level up your essential staff fast.”

“We suspect their business model is to treat workers illegally as independent contractors,” said Chiu.

By avoiding the employee classification, WorkWhile pays its workers a straight hourly wage regardless of premium overtime. Workers don’t get paid for all the time they spend on the shift, including the time they spend following the final delivery of a delivery driver shift, and don’t receive reimbursement for business expenses incurred when performing the shift, including vehicle expenses.

Instead of providing its workers with legally required worker’s compensation insurance, WorkWhile charges its workers a “Trust & Safety Fee” that amounts to 54 cents per hour for route delivery shifts and 47 cents for other shifts to fund “a substandard insurance-like product,” in the city attorney’s wording.

“Shifting the cost of worker’s compensation protections from the employer onto what are typically low-wage workers,” said Chiu. “It’s very clever, but of extremely dubious legality.”

Chiu pointed out that after the end of tax year 2021, WorkWhile created a “W-2 shifts” program, which classifies some temporary workers as W-2 employees — though their roles have no material distinction compared to other temporary staff, who are categorized as independent contractors. Chiu maintains that the existence of this group of W-2 employees indicates that “WorkWhile has the infrastructure to appropriately classify its workers, but has chosen to deny its workers their rights and benefits.”

“California passed the strongest law in the nation to stop worker misclassification, but laws cannot change employer practices unless there is enforcement,” said former assemblymember Lorena Gonzalez Fletcher, the author of Assembly Bill 5. “Staffing companies have always been employers, using an app doesn’t change that.”

The WorkWhile lawsuit is the latest one filed by the San Francisco city attorney’s worker protection team, a nascent group established in 2022 to litigate allegations of wage theft, misclassification and other abusive workplace practices.

“In recent years, the number of examples of misclassification has continued to grow. In some instances, unfortunately facilitated with app-based technologies,” said Chiu.

In February, the office reached a $2.1 million settlement with hospitality staffing company Qwick, which agreed to convert all of its misclassified California workers to employees.

The office has reached multi-million dollar settlements for Instacart and DoorDash workers, and is actively litigating a misclassification case against Uber and Lyft. All four are San Francisco, app-based companies. “Our region is known for the innovation and ingenuity of new business models,” said Chiu. “Our office just wants to make sure that companies are obeying the law, particularly when it comes to workers.”

“When gig workers are denied the basics of worker’s compensation, overtime and minimum wage, society often picks up the bill,” said Kim Tavaglione, executive director of the San Francisco Labor Council. “We have fought hard for these rights and protections, and we must ensure a level playing field where every employer plays by the rules.”

WorkWhile has rapidly scaled up since its launch in 2020, expanding from four areas including the Bay Area and Los Angeles to 40 major metropolitan areas across 27 states and has half a million workers, according to the complaint . The company received $13M Series A investment from Reach Capital in February, 2022.

WorkWhile’s CEO and co-founder, Jarah Euston, who lives and works in San Francisco, is also named in the suit as an individual.