S.F. gig staffing company to pay $4.5 million to settle claims it deprived workers of benefits

By St. John Barned-Smith, Writer

San Francisco staffing company WorkWhile will pay $4.5 million to settle a lawsuit filed by City Attorney David Chiu that claimed the company deprived its workers of benefits by misclassifying employees as independent contractors.

The settlement marks the second time in a just over a year that WorkWhile has agreed to pay restitution to its workers over accusations that it wasn’t compensating them properly.

Chiu said the agreement was part of the city’s ongoing effort to prevent San Francisco businesses from exploiting workers. The settlement affects WorkWhile delivery drivers. In late 2024, as part of the same dispute, the company agreed to pay restitution to other non-driver employees.

“As a result of this agreement, thousands of California drivers will have their stolen wages returned to them,” Chiu said in an emailed statement. “We are proud that this builds on our previous wins for workers and further levels the playing field for law-abiding competitors in the staffing industry.”

WorkWhile said in a statement that it “strongly disagreed” with the city’s claims, and said other parts of its lawsuit remained in dispute, particularly related to implementation of Proposition 22, a state law passed in 2020 granting companies exemptions to state laws allowing them to classify their drivers as “independent contractors”, rather than “employees”.

“WorkWhile will continue to defend the voter-approved framework set out in Proposition 22 and drivers’ right to flexibility and independence,” company officials said in a statement posted to their blog Wednesday. “At the same time, resolving claims tied to prior periods allows us to deliver immediate benefits to workers and move forward without unnecessary distraction.”

The city first sued WorkWhile in June 2024, accusing the company of classifying many of its workers as independent contractors, instead of as employees, allowing the company to skip paying them employment protections and other benefits.

WorkWhile provides hundreds of thousands of hourly workers in a wide variety of businesses and operates in more than two dozen states.

The City attorneys noted that WorkWhile vets its workers, monitors their performance, and disciplines them if they do not adhere to the company’s strict attendance policy, while also depriving them of legally-required workers’ compensation insurance coverage.

In late 2024, WorkWhile agreed to settle some of the city’s claims by paying $1 million in restitution to its “non-driver workers,” and reclassify them as employees. The most recent settlement, signed Jan. 16, requires WorkWhile to pay an additional $4.1 million in restitution to its delivery drivers who worked shifts in California before Sept. 5, 2025, and pay another $400,000 in civil penalties to the City Attorney’s Office.

The city is still litigating the case on behalf of WorkWhile drivers working for the company on or after September 5, 2025.

California Federation of Labor Unions President Lorena Gonzalez said the settlement gives misclassified delivery drivers millions of dollars in restitution for wages they earned but were not paid, and sends a message “that we are done letting companies get rich through a business model of exploiting workers.”

This article originally published at S.F. gig staffing company to pay $4.5 million to settle claims it deprived workers of benefits.