A gig economy customer service company will pay more than $2.9 million after misclassifying workers as independent contractors, the Office of the Attorney General for the District of Columbia announced.

Arise Virtual Solutions Inc. — whose clients include Barnes & Noble, Comcast, Disney and Walgreens — allegedly misclassified 250 customer service workers as independent contractors, according to the attorney general’s office. The $2,939,754 represents $2 million in minimum wages, overtime and paid sick leave and a $939,754 fine to the district. Arise will also stop doing business in DC.

The District of Columbia filed a lawsuit in January 2022 alleging that Arise misclassified agents who provide services through its technology platform as independent contractors. Arise recruits customer support workers called “agents” who work remotely from their homes and contracts with companies seeking to outsource call center services, according to the attorney general’s office.

“This settlement puts more than $2 million into the pockets of workers Arise took advantage of in a misclassification scheme — an illegal practice that is, unfortunately, all too common in the district,” Brian L. Schwalb, attorney general of the District of Columbia, said in a press statement. “The Office of the Attorney General will continue to fight to ensure that workers receive the wages and benefits they deserve and that District businesses compete on a level playing field. This case reflects our continuing commitment to holding accountable any business that tries to gain an unfair competitive advantage by skirting the District’s worker protection laws and that seeks to profit by taking advantage of hard-working District residents.”

The decision to settle the lawsuit was a “hard choice,” according to Arise.

“We vehemently disagree with the allegations made by the Office of the Attorney General — we think they were wrong on both the facts and the law,” it stated in a press release. “However, we chose to settle this matter so we can continue to advance our business outside of the District of Columbia.”

The settlement agreement was not a finding or admission of wrongdoing by Arise, and the court did not make any determination regarding the status of agents, according to Arise.

“For us, this was a business decision — a difficult one — that allowed us to move our business forward.”

The full statement is available online.