American cleaning company ‘Homejoy’ is done for

American cleaning company ‘Homejoy’ is done for

The company had to shut down after it was sued for its use of independent contractors -- news that could spell trouble for companies that do the same like Uber and Lyft.

A lawsuit over the use of independent contractors as opposed to full-time employees — something that well-known companies like Uber do — has shuttered the cleaning company Homejoy that could cause ripple effects in the business world.

Homejoy announced Friday it is shutting down. The company had faced legal trouble due to the fact that it characterizes its employees as independent contractors rather than employees of the company, according to a TIME report.

On-demand ride companies like Uber and Lyft do the same, as does laundry service Washio, and they could be facing their own legal troubles. A class-action suit against the company alleged that home cleaners were characterized as independent workers and not full-time employees, therefore the company was able to avoid offering certain benefits to workers.

Similar class-action lawsuits have been filed against companies like Postmates and Try Caviar, which also position themselves as middlemen that connect consumers with on-demand services rather than employers themselves.

However, Shannon Liss-Riordan, an attorney who regularly tackles these sorts of cases, said that unlike in a case of middlemen simply connecting on-demand services to people, these companies can control the workers and dictate how they act, determining whether they can work or not, according to the TIME report.

As a result, Liss-Riordan argued, they should be entitled to the same legal protections and get expenses reimbursed, get overtime, and be guaranteed the minimum wage.

Homejoy was founded in 2010 in San Francisco by Adora and Aaron Cheung. It is an online platform that connects customers and house cleaners, similar to how Uber connects customers and drivers. Homejoy was offered in the United States, Canada, and the United Kingdom in a total of 31 cities. Typically, customers are charged $25 to $35 per hour.

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