In what the US Department of Labor describes as could be the largest independent contractor misclassification case in its history, the agency has filed suit against customer service provider Arise Virtual Solutions Inc. The agency alleged the company — whose clients include Barnes & Noble, Comcast, Disney and Walgreens — misclassified more than 22,000 workers. However, the company said in a statement to SIA that it disagrees with the Department of Labor's findings.

An investigation found the company recruited workers with the promise they would “be their own bosses” and could earn income providing customer support to Fortune 500 clients, according to the department. In fact, the workers had no real autonomy, were subject to a strict scheduling policy and had to buy their own equipment, it said.

Also as part of the investigation, the department said the company:

• Expected workers to pay for their mandatory training while attending courses offered through the company’s proprietary software.
• Failed to pay workers for attendance at what often amounted to multiple weeks of required training.
• Required workers to create their own corporations or limited liability companies, or join existing business entities, to support the company’s attempts to claim these workers were independent contractors.
• Required workers to sign an arbitration agreement waiving their ability to seek restitution for alleged Fair Labor Standards Act violations in court.

Several complaints of wage violations from former workers at Arise were received, according to the department. The company is also involved in litigation involving similar allegations brought by the District of Columbia.

Arise disputed the department's findings.

“At Arise, we believe that people should have flexibility and control over where, when, and how they work,” the company said in a statement to SIA. “We respectfully disagree with the Department of Labor’s lawsuit and believe it threatens the kind of flexible work that millions of Americans choose today. We have and will continue to work with the Department of Labor to answer questions and illustrate how we are appropriately using the independent contractor relationship to protect this flexibility. We look forward to resolving this matter in a way that does not significantly impact the service partners and their agents and clients who use the Arise platform.” 

The DOL’s suit was filed in the Southern District of Florida in Fort Lauderdale. The company is based in Miramar, Florida.