A Letter to Handy CEO Oisin Hanranhan Re: Treatment of Workers
Chicago, Seattle, and Philadelphia write with collective concern over workplace abuses and the likely misclassification of your workers.
Dear Mr. Hanrahan,
We write to you to express our collective concern about the treatment of workers on Handy’s platform. For the reasons explained below, we have reason to believe that there is a strong likelihood that Handy has misclassified its workforce as independent contractors. Even analyzed under more permissive standards applicable in some jurisdictions (as compared to the ABC test applicable in others), Handy’s treatment of its workers has classic hallmarks of the employer-employee relationship.(1)
Over the past several months, our offices have communicated with dozens of workers across the country. Many have relayed concerning episodes in which Handy’s customers have sexually harassed or assaulted them. Others have been forced to do extra labor without any compensation. Several have expressed concern about safety protocols or an inability to take sick time when they are sick or fear exposure to COVID-19. In all instances, the workers have found Handy to be intentionally non-responsive and to minimize protections for its workforce.
Our concern for these workers is compounded by their particular vulnerability. As a result of being dispatched to private residences, typically with very limited communication in advance, Handy’s workforce is exposed to the very abuses our interviews have uncovered. These experiences connect with an unfortunate and longstanding history of mistreatment of cleaning and other domestic workers, many of whom are invisible or largely hidden from the public. To ensure that workers in our jurisdictions receive better treatment, we provide the letter setting out our current understanding of Handy’s practices and request additional data and other information to inform our position.
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(1) As you know, in 2017, the National Labor Relations Board wrote an advisory opinion describing in extensive detail how Handy’s workers qualify as employees under federal law. We find this analysis to be persuasive. In addition, we write informed by the enforcement action against Handy filed by District Attorneys Chesa Boudin and George Gascon under California’s AB5 law.
I. Handy’s Apparent Misclassification of its Workforce
Our jurisdictions utilize different tests in determining whether a worker is properly classified as an employee or independent contractor. For the sake of uniformity, we examine below the classification of Handy’s workforce under the “economic realities” test, which is a far more forgiving standard than the ABC test applicable in California, Massachusetts, and several other jurisdictions. Nevertheless, it appears that Handy’s workers are more properly characterized as employees under any legal standard. Below, we provide an overview of our initial analysis under the main components of the economic realities standard. See, e.g., Brock v. Superior Care, 840 F.2d 1054, 1058 (2d Cir. 1988) (discussing factors).
A. The Degree of Control Exercised by Handy
The question of control is often the predominating factor in the economic realities test. Typically, courts examine a number of practices to determine the degree of control exercised by the purported employer. Actions, rather than the words in the contract, dictate the analysis. People v. Uber Techs., Inc., 270 Cal. Rptr. 3d 290, 314 (2020), as modified on denial of reh’g (Nov. 20, 2020), review denied (Feb. 10, 2021).
1. Extent of Supervision
Handy directs the performance of its workforce through a monitoring and tracking system. Among other things, Handy appears to track the number and kind of jobs claimed by the worker, the worker’s geographic location beginning as many as four hours before a scheduled job and continuing until two hours after, the communications between cleaners and customers, and the customer’s rating and review of the cleaner. In addition, Handy limits the amount of information available to workers as jobs only list the neighborhood and start and end time. Workers must chose whether to accept a job with limited information and cannot contact customers to inquire about the job details before doing so. Handy’s penalization of workers through the imposition of numerous fees also enhances its control of the workforce.
2. Furnishing of Equipment
Handy provides its workers with tools that are crucial to performing their jobs, including the software application used to access jobs and communicate with customers. Handy also offers support to ensure customer satisfaction, including the provision of insurance to cover damage or theft as well as a Handy Happiness Guarantee, which provides that if customers are not satisfied, Handy will send another worker to perform the service at no fee. Handy also offers strong suggestions about the types of equipment and materials that workers should bring to a job site.
3. Ability to Work for Other Companies
Though Handy’s workers are permitted to work for other companies, this ability can be quite limited as a practical matter. More consequentially, workers are not permitted to do business with Handy’s customers outside of the app. Workers also are effectively penalized if they do not work a sufficient number of jobs each month, because the amount of compensation is tied to the number of jobs worked in the prior four weeks.
4. Method of Payment
There are many ways in which Handy’s arrangements make it seem as though they are paid by the hour. Workers are paid on an hourly basis, and Handy maintains control over compensation. As we understand it, compensation is based on the number of hours worked, along with Handy’s compensation formula which incorporates customer rating and job quantities, as well as repeat bookings.
B. The Workers’ Opportunity for Profit or Loss and Their Investment in the Business
Handy has limited the possibility of increasing compensation in several ways. By requiring that workers remain at a job and wait even when a customer is not present, workers are limited from moving on to another job. Handy also has limited workers’ ability to accomplish a job more quickly by labeling jobs by the hour, instructing workers not to leave if they finish early, and by fining them for doing so. Workers’ ability to increase their hourly wage based on performance is no different than employees in other hourly jobs, and not reflective of an entrepreneurial opportunity. Additionally, there is an option for customers to extend the length of the job through the Handy app, but not for the Handy worker. The ability to make more money by working more does not reflect opportunity to profit. See, e.g., Baker v. Flint Eng’g & Const. Co., 137 F.3d 1436, 1441 (10th Cir. 1998) (“Plaintiffs’ ability to maximize their wages by ‘hustling’ new work is not synonymous with making a profit.”).
C. The Degree of Skill and Independent Initiative Required to Perform the Work
Handy’s platform is focused on lower-skilled work, including cleaning and furniture assembly. Though Handy jobs can include work for electricians or plumbers, Handy does not require proof of licensure to take on such jobs. Courts have routinely concluded that such work does not require much skill, which counsels toward a finding of employment status. See, e.g., Keller v. Miri Microsystems LLC, 781 F.3d 799, 809 (6th Cir. 2015) (“[I]f the worker’s training period is short, or the company provides all workers with the skills necessary to perform the job, then that weighs in favor of finding that the worker is indistinguishable from an employee.”); Perez v. Super Maid, LLC, 55 F. Supp. 3d 1065, 1077–78 (N.D. Ill. 2014) (tasks of vacuuming, dusting, cleaning kitchens and floors, making beds, and taking out trash are low-skilled).
D. The Permanence or Duration of the Working Relationship
Handy’s workforce resembles at-will employees. Their contracts are of an unlimited duration and the workers may continue to work for the company so long as their job performance is satisfactory and they comply with Handy’s requirements and codes of conduct. In addition, as the NLRB concluded, the compensation system incentivizes workers to work frequently and continuously for Handy.
E. The Extent to which the Work is an Integral part of Handy’s Business
The work of cleaning homes, assembling furniture, and performing handyman tasks is Handy’s business. It holds itself out as a company that offers these services on its platform and connects customers with its workforce to perform these tasks. The work could not be more integral to Handy’s business.
II. Potential Violations of State and Local Laws
We also have reason to believe that Handy is likely violating local regulations irrespective of whether Handy classifies its workers as independent contractors or employees. Various jurisdictions have implemented a Domestic Worker Bill of Rights, some of which cover employees and independent contractors, and other requirements relating to minimum wage, sick time, and meal and rest breaks. Across the nation, state and local governments issued stay at home orders, shutting down non-essential businesses. In some cities, Handy did not meet the definition of an essential business, but Handy continued operations.
Philadelphia Municipal Code § 9–4500 et seq. guarantees domestic workers, including independent contractors, the right to paid sick leave. Workers accrue an hour of paid sick leave for every 40 hours they work. Domestic workers also accrue unpaid leave, which accrues at the same rate as paid leave and can be used for any of the reasons under Philadelphia’s Paid Sick Leave Ordinance, including for taking care of a sick child or family member. Handy is required to grant sick leave whenever a worker requests it, the worker only needs to notify Handy before their shift starts, and cannot retaliate against the worker for exercising their rights. Handy not only fails to inform its workers of their rights, but punishes them for taking leave by issuing cancellation fees.
Seattle Municipal Code § 14.23 requires employers pay their domestic workers, including independent contractors, a minimum wage of $16.69. While the listing price of most Handy jobs may meet the minimum wage requirement for the hours working at the job site, the numerous fees imposed by Handy, travel time, time spent working off the clock, and other costs significantly reduce a worker’s actual earnings, causing the actual pay to fall well below the minimum wage requirement. Handy does not account for the minimum hourly wage required by Seattle’s ordinance when setting compensation levels. In addition, both Philadelphia and Seattle’s Municipal Code require employers to provide domestic workers, regardless of employee status, with an uninterrupted 30 minute lunch break after a 5 hour working period and 10 minute rest breaks for every 4 hours of work. If the worker cannot take a meal and rest breaks, then the employer must compensate the worker. Handy does not offer these options to its workers.
Chicago’s Minimum Wage and Paid Sick Leave Ordinance similarly applies to domestic workers. Municipal Code of Chicago § 1–24–010. Handy workers are “domestic workers” under the ordinance because their “primary duties include housekeeping; house cleaning; home management;… laundering; … and other household services to members of households or their guests in or about a private home or residence, or any other location where the domestic work is performed.” Id. Handy workers are entitled to the ordinance’s protections, including accruing one hour of paid sick leave for every 40 hours worked. Id. § 1–24–045(b)(2).
In addition, Handy workers have experienced solicitations, inappropriate touching by customers, and sexual assault. Most workers stated that when they report to Handy, they never receive a response and Handy often charges them with fees for leaving early or canceling the job. In California and New York City, for example, anti-discrimination laws expressly cover independent contractors, which means Handy has an obligation and duty to take immediate and appropriate corrective action when its workers suffer harassment. Taking weeks or not responding at all is not taking immediate corrective action.
III. Requests for Information
In light of our concerning discoveries about workers’ experiences as well as the initial legal analysis set forth above, we are requesting additional information about Handy’s business practices. Unless otherwise stated, all requests for information cover the time period from May 1, 2019 to the present:
1.The complaints Handy received from its workers regarding sexual assault or harassment by a customer. Include in your response:
a. the nature of the complaint;
b. the steps Handy took to investigate;
c. the outcome of the investigation; and
d. any steps Handy took as a result of the investigation
2. Handy’s customers removed and/or suspended from the platform arising out of a worker’s report of sexual assault or harassment. Include in your response:
a. the nature of the complaint;
b. the steps Handy took to investigate;
c. whether the customer was suspended or removed;
d. the date of the decision; and
e. the basis for the decision
3. Documents reflecting any Handy policy relating to complaints received from workers regarding sexual assault or harassment by customers, including but not limited to the review, investigation, and response taken by Handy.
4. Documents reflecting any Handy policy relating to workers who leave jobs prematurely due to their concerns about safety or workplace conditions, including but not limited to, any compensation provided for transportation.
5. Documents reflecting any Handy policy relating to the imposition of a fee or penalty on a worker or the reversal of a fee as a result of a dispute by the worker.
6. Aggregate totals for the following categories of information:
a. Number of jobs booked by Handy workers;
b. Number of times a fee was imposed on a worker for cancellation;
c. Number of times a fee was imposed for “non-compliance” by a worker;
d. Number of times a fee was imposed for a worker leaving an appointment or job early;
e. Number of times a fee was imposed for a worker arriving to an appointment or job late; and
f. Number of times any other fee was imposed on a worker.
7. For each of the categories enumerated 6(a)-(f):
a. the number of times that a worker disputed the fees; and
b. the number of times that Handy waived, reversed, or otherwise did not charge the fee to the worker
8. Documents reflecting any policy relating to the communications between workers and customers both on and off Handy’s app and/or platform, including but not limited to any policies relating to the suspension or termination of Handy workers for communicating with and/or working for customers outside of the platform.
9. Aggregate totals for the following categories of information:
a. Number of workers suspended for communicating with customers off of Handy’s platform;
b. Number of workers terminated for communicating with customer off of Handy’s platform;
c. Number of workers suspended for performing jobs for customers off of Handy’s platform; and
d. Number of workers terminated for performing jobs for customers off of Handy’s platform.
10. Documents reflecting any Handy policies relating to the assignment of workers to a team or a job without the worker voluntarily choosing such a team or job, including but not limited to the instant book option.
11. Documents reflecting any Handy policies relating to the accrual of, use of, or compensation for sick time, personal time, or vacation time provided to workers.
12. Documents reflecting any Handy policies to ensure that the hourly rate of pay for a worker complies with all applicable local, state, and federal minimum wage and overtime laws.
13. Documents reflecting any Handy policies to ensure that workers are provided meal and rest breaks or are otherwise compensated for such time under all applicable local, state, and federal laws.
14. Documents reflecting any Handy policies to ensure that workers comply with all local, state, and federal public health orders relating to the COVID-19 pandemic, including but not limited to, the cessation of operations.
We request that you provide this information on or before June 18, 2021. Should you have any questions or need further clarification, please do not hesitate to speak with any of the undersigned. We look forward to receiving your response.
Sincerely,
Andrew Fox
Director, Office of Labor Standards
City of Chicago Department of Business Affairs and Consumer Protection
121 North LaSalle Street, Room 805
Chicago, IL 60602
BACPlaborstandards@cityofchicago.org
Steven Marchese
Director
Office of Labor Standards
810 3rd Avenue, Suite 375
Seattle, WA, 98104–1627
laborstandards@seattle.gov
Amanda J. Shimko, Esq.
Director, Office of Worker Protections
PHL Department of Labor
amanda.shimko@phila.gov
CC: Jennifer Bishop, Handy, General Counsel
Shannon Shaw, Angi, Chief Legal Officer
