The city of San Francisco partially settled a case with a staffing platform over the misclassification of workers as independent contractors. WorkWhile, the firm in the case, will pay $1 million in restitution. Separately, the state of Minnesota reported a $300,000 settlement with staffing platform Arise Workforce Solutions.

San Francisco’s settlement with WorkWhile requires the firm to pay $1 million in restitution to its non-delivery workers. San Francisco City Attorney David Chiu announced the settlement on Dec. 17. WorkWhile must also convert the workers to employees.

Chiu’s office first sued the company in June citing misclassification of gig workers, including those working in warehouses, hospitality and food services.

“This agreement is part of our ongoing, groundbreaking work to fight misclassification and prevent these gig app misclassification models from taking root,” Chiu said in a press release. “We will not tolerate companies denying workers their rights and benefits or, even worse, attempting to shift the costs onto the workers.”

The stipulated partial judgement and injunction was approved by the San Francisco Superior Court on Dec. 10.

As employees, the workers will be entitled to the full range of workplace protections and benefits, including overtime pay, paid sick leave, paid family leave and workers’ compensation insurance.

WorkWhile has been contacted for comment.

While this aspect of the case covers non-delivery workers, Chiu said his office will continue to litigate the case regarding WorkWhile’s delivery workers.

The agreement with WorkWhile is the second of its kind for Chiu. In February 2024, his office secured an injunction — the first in California — requiring a gig economy staffing company, Qwick, to permanently reclassify thousands of workers.

Minnesota case

In a separate case, Arise Virtual Solutions agreed to pay $300,000 in restitution to workers over independent contractor misclassification, Minnesota Attorney General Keith Ellison announced on Dec. 19. Arise will also stop doing business in Minnesota.

Arise, based in Florida, connects work-at-home customer service agents with corporations seeking to outsource call center services, Ellison’s office said. There were approximately 300 customer service agents in Minnesota working on the Arise platform in the past four years.

Arise responded to the Minnesota Attorney General’s announcement.

“We disagree with the Minnesota Attorney General’s allegations, which we believe are meritless and based on a misunderstanding of Arise’s business model and an incorrect application of the law,” the company said in a statement to SIA. “This settlement agreement, which is not an admission of wrongdoing, allows us to continue moving our business forward outside of Minnesota. We remain firm in our stance that we properly use the independent contractor relationship with service partners and agents.”

Any Minnesota-based worker who trained or performed work on the Arise platform since May 9, 2020, is eligible to receive a portion of the $300,000 settlement fund, according to the Attorney General’s office. A claims administrator will contact eligible workers.

“Employer misclassification fraud hurts workers who were misclassified and their families, but it also hurts businesses who play by the rules and are undercut by competition willing to break the law,” Ellison said in a press release.

Earlier this year, Arise had reached a $7 million settlement with the FTC.