The cleaning company Homejoy announced on Friday that it was shutting down, a move that could signal trouble for other companies that say they use independent contractors rather than full-time employees.
Homejoy, like on-demand ride companies Uber and Lyft and laundry service Washio, has faced legal trouble over the manner by which it categorizes its employees; in a class-action suit, the company was said to have classified its home-cleaners as independent workers rather than full employees, an alleged mischaracterization that allows the company to provide fewer benefits for workers. The suit was the "deciding factor" in shutting down Homejoy, said chief executive Adora Cheung, according to the Los Angeles Times.
The suit against Homejoy came at the same time as class-action suits against delivery companies Postmates and Try Caviar. All three companies are similar in that they see themselves as middlemen connecting consumers with on-demand services.
"When companies have control over their workers, when they get to dictate how they should act, when they get to decide whether they can work or not work, those are employees," Shannon Liss-Riordan, an attorney who specializes in employee mischaracterization, told TIME earlier this year. "These are the workers carrying out the services that these companies provide. So these workers are entitled to the protections of the law, to get their expenses reimbursed, to be guaranteed overtime, to make [at least] minimum wage.”