Homejoy Is Shutting Down After One Too Many worker court cases

employee classification lawsuits in opposition to on-demand companies have claimed their first casualty: cleansing service Homejoy is shutting down on July 31, Re/code reports.

although the startup had struggled to boost sufficient cash to remain in trade, CEO Adora Cheung says the “deciding issue” was once the four worker classification proceedings it was once going through.

Gig economy companies like Homejoy do not hire the employees who help keep their platforms afloat as employees, this means that that they do not pay business enterprise taxes or have an duty to pay minimal wage, present lunch breaks, or compensate staff for time between jobs.

The legality of this setup has been called into query again and again of late, as a result of court cases from employees who allege they have been misclassified as unbiased workers on systems like Uber, Lyft, and Homejoy competitor at hand.

Some firms are changing their employment construction in response. Grocery supply service Instacart lately started out changing lots of its supply folks to part-time workers, whereas bundle delivery startup Shyp made a equivalent transfer prior this month. Many new on-demand services, meanwhile, are opting out of contract work altogether in want of conventional employment—hoping to offer higher customer service, handle just right staff, and, possibly most truthfully, keep away from Homejoy’s destiny.

update: at hand is offering $1,000 signing bonuses to former Homejoy cleaners. “With the contemporary news of Homejoy’s closure, we commend Adora, Aaron and team on what they built,” a spokesperson for the company reportedly told Re/code. “We hope that Homejoy professionals take us up on [this] chance.”

Google, which expressed pastime within the home products and services industry previous this yr, has scooped up 20 or so individuals of the Homejoy tech workforce.

[by means of Re/code]