More People Are Being Classified as Gig Workers. That’s Bad for Everyone.

What comes to mind when you think of a mom-and-pop small business: A hardware store? A diner? A family-run clothing store or small-scale supermarket?

Here’s one that’s probably never crossed your mind: a dishwashing business. By that, I mean a business of a single person — unincorporated, no business address or capital behind him, just one guy — working as a dishwasher for a restaurant, using the restaurant’s machinery to wash the restaurant’s dishes on the restaurant’s premises.

Two explosive enforcement actions disclosed by the City and County of Denver this month expose the lengths to which some corporations will go in trying to exploit the “gig” business model. At issue is whether dishwashers and others like them, placed in their jobs by online temporary staffing agencies, are employees of the agencies or independent contractors running their own businesses.

To Denver Labor, the city’s labor enforcement office, they are employees under law. The office recently issued citations to two businesses, Instawork and Gigpro, seeking over $1 million in restitution and fines.

These two staffing companies place workers in a range of hospitality positions, including as servers, bartenders, line and prep cooks and, yes, dishwashers. The citations assert that the companies misclassified the workers as independent contractors and in doing so, violated the city’s minimum wage ordinance and state law on paid sick leave.

Colorado’s labor law defines an employee as any person who performs labor or services for the benefit of an employer. Factors that go into making that determination include the degree of control an employer exercises over the person and the degree to which the person’s work is the primary work of the employer. By contrast, an independent contractor is considered someone who works primarily free of control and direction and is “customarily engaged” in an independent trade or business related to the service performed.