Instacart faces class-action lawsuit over wages and tips

On Behalf of | Feb 27, 2019 | Employment Law

Instacart’s pitch is simple and appealing: use the company’s app on your phone to order groceries, then a “personal shopper” picks up the items from the store and delivers them to your Milwaukee home at a time that’s convenient for you. While customers might be pleased with the arrangement, some of Instacart’s independent contractors (they’re the “personal shoppers”) are not as happy.

The company is facing a class-action lawsuit over wages and how its workers are paid. According to a news source, Instacart guarantees workers a minimum of $10 per job, but the lawsuit says the company is offsetting the wages with tips workers receive from customers.

The lawsuit says the company tells its customers that 100 percent of tips go “directly to shoppers,” but it “intentionally and maliciously misappropriated gratuities in order to pay plaintiff’s wages.” The suit alleges that “Instacart knew customers would believe their tips were being given to shoppers in addition to wages, not to supplement wages entirely.”

Two years ago, Instacart settled a $4.6 million lawsuit over claims that it misclassified personal shoppers as independent contractors. That suit also claimed that Instacart was not reimbursing workers for work expenses. The settlement required Instacart to change its description of its service fee, so that people would not confuse it with tips.

Workers say that since a revised payment structure was put in place last October, matters have gotten worse and that in many cases, workers are receiving less than minimum wage. In one case, a worker received a $10 tip from a customer, but just 80 cents from Instacart.

In another case reported on in the news article, a worker received $7.26 (which included reimbursement for mileage) for two hours of work.

It should be noted that the federal minimum wage is $7.25 per hour.

If you and your fellow workers have been denied minimum wage, overtime pay, or have been misclassified as salaried employees or independent contractors, contact the employment law attorneys of Milwaukee’s Alan C. Olson & Associates.


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