Online staffing firm Qwick Inc. struck a deal with the city of San Francisco to reclassify all its misclassified workers in California as employees instead of independent contractors, San Francisco City Attorney David Chiu announced Feb. 22. Chiu submitted a proposed final judgment and injunction to the court last week. If the settlement is approved, it will be the first injunction in California requiring an online staffing firm to permanently reclassify thousands of workers, according to Chiu.

Qwick will also pay its California workers $1.5 million in restitution under the proposed final judgment and injunction. It will also provide a bank of accrued sick leave hours to workers that stay on with the company as employees. That accrued sick leave is valued at up to $350,000. In addition, Qwick will pay $250,000 to the city in civil penalties.

Qwick, based in Phoenix, provides workers to the hospitality industry and has been operating in California since 2019. Through its mobile app, Qwick provides servers, bussers, bartenders, baristas, dishwashers, cooks, event staff and more.

Chiu had sued the company in August 2023.

“Hospitality work is grueling, and our hotel and restaurant workers deserve to be treated fairly,” Chiu said in a press release. “This proposed judgment puts money back in the pockets of workers and ensures that they will have the full complement of employee rights and benefits moving forward.”

He continued, “It also ensures that law-abiding staffing companies will no longer be at a competitive disadvantage. We are sending a clear message: We will not allow this illegal business model to take root in the hospitality industry.”

Qwick responded to the city attorney’s press release in a statement to SIA by its Chief People Officer Dana Barbeau.

“At Qwick, our freelancers are at the heart of everything we do. We value their contributions and are dedicated to providing fair, supportive and safe working environments. We believe in the gig economy’s potential to offer flexible and meaningful opportunities, and it is crucial to ensure our freelancers receive the benefits and protections they deserve.

“Qwick is steadfastly focused on creating opportunities for our freelancers and business partners to thrive and succeed. We’ve dedicated considerable efforts to better serve the industry’s evolving needs for some time now, and we’re excited to announce that our California markets will be the first to experience our enhanced, compliance-focused W-2 model. Our dedication remains unwavering as we continue to provide innovative opportunities for the hospitality community to flourish. We have resolved matters with the state of California and are committed to disbursing a total of $1.75 million, with $1.5 million going to affected Qwick freelancers and an additional $250,000 to the San Francisco City Attorney’s Office, as well as providing affected freelancers with a bank of sick leave.

“The future of work is evolving, and our goal is to lead that evolution by providing innovative opportunities that empower our freelancers. We are committed to making continuous improvements to ensure that Qwick remains a platform where freelancers and business partners can thrive and succeed.”

Former California legislator Lorna Gonzalez also weighed in on the lawsuit. Gonzalez had authored California’s AB 5 law aimed at getting tough on independent contractor misclassification.

Gonzalez said the “settlement with Qwick embodies everything we want to see in enforcement efforts: a permanent injunction to reclassify workers as employees, restitution of wages to the workers and penalties to reimburse the costs of enforcement.”

Gonzalez is now principal officer of the California Labor Federation.