WorkWhile Agrees to $4.5 Million Settlement Over Driver Classification in San Francisco

In California, whether a worker is classified as an employee or an independent contractor affects nearly every part of the job. It determines access to overtime, sick pay, meal and rest breaks, and workers’ compensation coverage. For workers in app-based jobs, those classifications are not always straightforward, especially when the work is assigned through a platform instead of a traditional manager.

Worker misclassification is at the center of a recent settlement involving WorkWhile, an online staffing company that uses an app to connect temporary workers with employers across various industries. The company agreed to pay $4.5 million to resolve allegations brought by the San Francisco City Attorney’s Office that it misclassified delivery drivers and failed to provide required protections. The case [People of the State of California v. WorkWhile et al / Case No. CGC-24-615401] was filed in San Francisco Superior Court.

WorkWhile operates as a digital staffing platform that assigns workers to short-term shifts. According to the City Attorney’s Office, the company treated delivery drivers as independent contractors, even though the work arrangement may have met the legal standard for employment under California law.

As part of the January settlement, WorkWhile agreed to pay $4.1 million in restitution to drivers who worked shifts before September 5, 2025. The company will pay another $400,000 in civil penalties to the San Francisco City Attorney’s Office.

WorkWhile has said it “strongly disagreed” with the City’s allegations but agreed to resolve the matter “to put workers first.” The company has also pointed to Proposition 22 in explaining its classification of drivers as independent contractors, commonly referred to as gig workers. That law, passed by California voters in 2020, allows certain app-based transportation and delivery companies to treat drivers as independent contractors while providing limited benefits, such as minimum earnings guarantees and health insurance contributions.

Even with Prop 22 in place, California worker classification disputes often come back to the state’s general employment standards. The ABC test in Labor Code section 2775 is the primary framework used for determining worker status. Under that test, a worker is an employee by default unless the hiring company can show the worker is free from control, performs work outside the company’s usual business and is engaged in an independently established trade or occupation. If a company cannot meet all three requirements, the worker is generally considered an employee under California law.

Classification affects wages and workplace protections, including overtime pay, meal and rest breaks, paid sick leave, family leave and protections against retaliation. When workers are misclassified, those protections can be lost even if the day-to-day work looks similar to a traditional employee role.

In the WorkWhile case, the city alleged that drivers were performing work that was central to the company’s business while being labeled as contractors. In the gig economy, workers assigned shifts through an app often still follow set schedules, instructions and performance expectations. The city also raised concerns about unpaid wages and missed breaks.

A platform label or contract title alone does not decide classification. In cases like this, courts and regulators focus on how the work is structured rather than the job title. App-based work can blur the lines around worker classification, and some employers take advantage of this to reduce labor costs. However, the ABC test provides a clear way to determine whether a worker is an employee or an independent contractor. 

McCormack Law Firm represents workers in employment disputes involving misclassification, unpaid wages and other workplace issues. If you suspect you have been misclassified, contact us today at 415.925.5161 for a free consultation with a San Francisco employment lawyer.

Disclaimer: This article is for information purposes only. McCormack Law Firm is not involved in this case.