Handy is a startup that allows people to order handymen and house cleaners on demand. Like many similar companies, many of those who do the actual work for Handy aren't technically employees—instead, they're "independent contractors" and thus ineligible for benefits. This distinction doesn't sit well with two of Handy's workers, who have filed a class-action lawsuit alleging that the company misclassifies workers as "independent contractors" in a bid to save money.
Handy is hardly alone when it comes to that charge. In June, an attorney in Suffolk County, Massachusetts, sued the transportation startup Uber—which, like Handy, classifies its workers as independent contractors—for keeping some of the tip income drivers received directly from customers. And in August, the Ninth Circuit Court of Appeals ruled that Federal Express wrongly grouped 2,300 of its FedEx Ground workers as contractors rather than employees.
The difference between independent contractors and employees is more than just semantic. Unlike employees, independent contractors do not receive benefits like overtime, health care, unemployment insurance, or paid time off. In exchange, contractors are freed from obligations to their employer that regular, salaried employees must obey.