A California-based staffing company could owe more than $2.3 million in restitution, penalties and fines for minimum wage, overtime and sick leave violations involving thousands of Denver workers, according to a report from the Denver Auditor’s Office released Monday.
The company, Advantage Workforce Services, provides gig work jobs that let workers choose from things like food service and cleaning shifts, classifying its workers as independent contractors.
But the Auditor’s Office says that structure is the same as other staffing companies where employees do not have control over things like their salary or work structure — meaning workers are not independent contractors but are instead employees who should get paid sick leave and overtime.
“When employees are misclassified as independent contractors, they are denied critical workplace protections and frequently have their wages stolen,” wrote Taylor Overschmidt, a spokesperson for the Auditor’s Office.
Denverite has reached out to Advantage Workforce Services’ parent company, Instawork, for comment.
Instawork is suing Denver over other wage theft fines the city levied on the company in January.
The office found that Instawork owed more than $1 million in restitution and fines over similar violations involving about 3,000 misclassified workers.
In July, Instawork sued the city over those fines. Advantage Workforce Services also sued the city over hundreds of thousands of dollars in fines the city said the company owed because Advantage Workforce Services did not turn over relevant documents, which the company claimed were “sensitive and confidential.”
Now, the Auditor’s Office says Advantage Workforce Services is the same company as Instawork, and that the business failed to hand over payroll data involving 1,450 employees in that January investigation.
“Instawork claimed these employees worked for Advantage Workforce Services, which we determined is not a separate company,” Overschmidt said. “Instawork fully owns and controls Advantage Workforce Services. They provide the same kind of labor, sometimes for the same clients, and subject employees to the same rules, requirements, and policies. All work gets performed through Instawork’s app and workers have a single profile and performance score.”
Denver has passed stronger wage protection laws in recent years.
The city raised its minimum wage starting in 2020 and passed a number of laws strengthening the ability of the Auditor’s Office to go after wage theft. Since then, the office has recovered record-breaking money for workers.
In a statement Monday, Auditor Timothy O’Brien emphasized that companies committing wage theft hurt other businesses in the city.
“The staffing industry has been around for a long time, and its members shouldn’t have to compete against a rival who profits from wage theft,” he said. “The fact that Instawork uses an app doesn’t change the basic principle that these people are employees entitled to legal wages, including overtime and paid sick and safe leave.”
Meanwhile, disputes over gig work and independent contracting have played out with other national tech companies like Uber and Lyft for years. The federal government released new rules this year expanding protections for gig workers, but those protections are expected to be challenged in court.
In Denver, Instawork will be able to appeal the Auditor’s Office finding.
