Minnesota and DC sue Target-owned Shipt delivery service for worker misclassification

Shipt argues that its workers prefer the flexibility of being independent contractors.

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The Minnesota and District of Columbia attorneys general are suing Target-owned Shipt delivery service over worker misclassification, CBS News has reported. The lawsuits accuse the company of designating its "personal shoppers" (who pick and deliver grocery orders) as independent contractors to avoid paying benefits like state unemployment insurance and worker's compensation.

"Increasingly, we’re seeing companies abuse hard-working District residents by fraudulently calling them independent contractors and, as a result, denying them wages and benefits they are legally owed," said DC AG Karl Racine in a statement.

Shipt said it disagrees with the allegation and that most of its workers prefer being able to set their own hours. "Shoppers with Shipt are independent contractors, and the flexibility that comes with being an independent contractor is the primary reason Shipt Shoppers choose to earn on our platform," spokesperson Evangeline George told CBS News. Citing its own survey, it said that 80 percent of its workers named such flexibility as a key priority.

However, Minnesota attorney general Keith Ellison said the company controls "virtually every facet of a shopper's work" despite claiming the workers are independent. "Unlike other employees, these workers have no clarity on how much they will be paid day to day, and they often don't receive the minimum wage and overtime they're entitled to," he added.

The suits seek to recover paid sick leave owed, unpaid wages, payments owed for unemployment insurance, penalties and more. Other delivery companies including DoorDash have faced similar actions, and Instacart recently agreed to pay $46.5 million in a settlement with the city of San Diego over misclassified workers. Earlier this year, Massachusetts sued Uber and Lyft for identifying drivers as contractors.