HandyA new lawsuit against Handy.com claims that its housecleaners should be considered employees, not independent contractors, because the company dictates all sorts of working conditions.

It comes closely after a similar lawsuit by Uber drivers filed last year.

Both cases — which could set the stage for still more suits — strike at the heart of the new breed of on-demand services, which have received millions in venture backing.

Companies like Handy and Uber consider themselves to be middlemen rather than service providers. Treating workers as independent contractors is basic to their business model, allowing them to quickly expand and contract their workforces, and to sidestep expenses like health insurance, sick time and disability coverage.

“Professionals who use the Handy platform to book jobs are independent contractors, not Handy employees,” the New York company said. “They choose the Handy platform because it provides much needed flexibility by allowing them to book whatever jobs best suit them.”

Handy started in 2012 under the name Handybook, and has raised over $40 million in venture backing.

Plaintiffs Vilma Zenlaj and Greta Zenelaj allege that the company dictated everything from what they wore to how to interact with customers.  Handy.com required plaintiffs to wear a Handy.com T-shirt, they had to greet the customers with ‘Hi, I am Vilma from Handybook (the company’s former name); should I take my shoes off?’  They had to ask a client how or whether to use the restroom.

The plaintiffs, who are sisters, allege they often cleaned three or four houses a day, and had about an hour to get from job to job — time for which they were not paid. They allege that travel time was also considered the break period, and that eating lunch and dinner in their cars was a daily occurrence.

The more that companies try to control workers, the more they are creating an employment relationship.  The rub is that on the internet, companies want to create a predictable user experience and to do that, they need to control the service providers.  At the same time, the (on-demand) companies do not want to be employers, because it would make them liable for many things.

The case laid out a range of ways Handy allegedly violated California labor code, including failing to provide meal and rest periods, not paying for overtime, paying less than minimum wage (by not paying for travel time), and not covering business expenditures such as gas and parking, paying more slowly than is legal, and not providing pay stubs showing their hours.

This case is similar to the FedEx Ground cases we handled where in August, the Ninth Circuit held that Oregon and California FedEx Ground drivers should be considered employees, not contractors.