Work service platform Handy Technologies Inc. agreed to pay $6 million to settle allegations it misclassified workers as independent contractors under California’s AB 5 law. The district attorneys of San Francisco and Los Angeles announced the settlement on May 18.

“This settlement is not only a victory for the California workers who were misclassified by Handy Technologies Inc., but also a warning to other companies that engage in similar unlawful behavior,” San Francisco District Attorney Brooke Jenkins said in a statement.

The district attorneys originally brought the suit in 2021.

Handy dispatches workers to provide cleaning and handyman services at clients’ homes. In addition to the restitution, the company agreed to a permanent injunction to avoid future misclassification. The district attorneys said the company has made substantial changes to it is business operations. For example, workers on its site can now set their own hourly pay rates and, after a job is claimed, can contact customers directly to learn more about the services requested and negotiate terms such as hours and pay without being contractually bound to perform the work or penalized by Handy for rejecting the job.

“This judgment is a long-awaited triumph for workers who have been unjustly treated as independent contractors, stripped of their right to healthcare, paid leave and unemployment insurance,” said Los Angeles County District Attorney George Gascón in a statement.

The $6 million settlement includes $4.8 million in restitution to workers and a civil penalty of $1.2 million. There are approximately 25,000 workers who worked between March 2017 and May 2023.