Owned by the Target Corporation, Shipt is an American delivery service headquartered in Birmingham, Alabama, and they are currently being sued over worker misclassification. The lawsuits are accusing the delivery company of unlawfully mislabeling roughly 200,000 of their personal shoppers as independent contractors in an alleged ploy to avoid paying benefits like state unemployment insurance and worker's compensation. However, since the lawsuits have been filed, the delivery company refutes any allegations over the misclassification of their delivery/personal shoppers.
Shipt names their workers "shoppers" because, as part of their job role, they purchase things on behalf of others and deliver it for a fee. Users are able to go on the Shipt App, place an order for things they need to be picked up, like groceries or other personal goods, and pay for it. A Shipt "shopper" will then log into the app, see there is an available order, and will agree to take on the order. Then they will fulfill the order by going to the store, getting the required items from the order, paying for it using a Shipt visa card, and then delivering it to the user who originally placed the order. Upon completion of the order, the shopper will take a cut of the cost associated.
In an interview, a spoke person for Shipt claims that their shoppers who work as independent contractors actually prefer setting their own hours. Taking from their own company survey, it claims that roughly 80% of their workers view schedule flexibility as a critical priority. Then further stating that the flexibility that comes with being an independent contractor is one of the main reasons many shoppers choose to earn on the platform.
However, while Shipt may have attempted to push the idea that their delivery/personal shoppers are able to choose their own work hours, essentially having complete control over their own schedules, the lawsuit shows that the company has gone out of its way to exert complete control over every facet of the shopper's work.
What is Worker Misclassification and Have I Been Misclassified at Shipt?
Not only is there evidence that their shoppers have zero clarity over how much they will be paid daily, they often do not even receive the standard minimum wage and overtime they're entitled to under the Fair Labor Standards Act (FLSA). Under the FLSA, the law states that once an employer-employee relationship has been determined, and the employee is engaged in work, that employee is now subject to the FLSA—entitling them to legally be paid the Federal minimum wage of $7.25 per hour.
In most cases, in overtime, if the employee is subject to work those hours, their employers are legally required to pay time and one-half of the employee's regular rate of pay for all hours worked in excess of 40 per week. Companies, like Shipt, can take advantage of their employees not knowing this information or by even width holding the information that can help them understand if they have been misclassified. Thanks to the FLSA, employees have the upper hand. When a company tries to label you as an independent contractor, in the eyes of the law, your status depends on your duties and responsibilities.
The FLSA uses a multi-factor test to help you determine if you have been properly classified as an independent contractor. Some examples of what may qualify workers as employees vs. independent contractors include that your employer sets your work hours, the company provides the tools and materials needed to perform the job, the company exerts a high level of control over the work you do, and they require solely work/provide services for them.
Over the years, there have been many other delivery companies, like Shipt, who have had lawsuits taken out against them for similar behavior against their workers. Recently, the delivery company, Instacart, agreed to a settlement for $46.5 million for the city of San Diego over misclassified workers. Then earlier in 2022 in Massachusetts, Lyft and Uber were sued by the state for misclassifying their drivers as contractors.
If you have ever worked for or delivered via target's delivery services or if you believe Shipt has misclassified you or someone you know, it is important that you talk to an attorney to see if you've been cheated out of overtime wages. Do not hesitate to contact us. For more information regarding the Shipt lawsuit and to learn if you are eligible for compensation, you can contact Morgan & Morgan today by completing our free, no-obligation case evaluation form today.