The San Francisco city attorney has reached a multimillion-dollar settlement with a hospitality-staffing startup accused of illegally misclassified California workers and denied them guaranteed wages, benefits and other protections.
San Francisco City Attorney David Chiu announced Thursday that his office struck a $2.1 million agreement with Qwick, an Arizona-based startup that provides on-demand staffing for restaurants, hotels, bars and caterers. Qwik was accused of treating hotel and restaurant workers as freelancers rather than employees, denying them access to state and local employee rights. The company allegedly controlled workers’ shifts and evaluated their performances on the platform, despite classifying them as independent contractors.
Under the proposed agreement, Qwick must pay $1.5 million in restitution to its employees in the state and provide workers who stay on as employees a bank of accrued sick-leave hours valued at up to $350,000. The company must also pay civil penalties totaling $250,000 to The City.
The proposed final judgment and injunction were submitted Wednesday for approval from the San Francisco Superior Court. If approved, it would be the first state injunction requiring a gig-working company to reclassify thousands of workers, the City Attorney’s Office said.
“This proposed judgment puts money back in the pockets of workers and ensures that they will have the full complement of employee rights and benefits moving forward,” Chiu said in a statement. “It also ensures that law-abiding staffing companies will no longer be at a competitive disadvantage.”
In a statement, Qwick's chief people officer Dana Barbeau said, "Our freelancers are at the heart of everything we do. We value their contributions and are dedicated to providing fair, supportive and safe working environments."
"We believe in the gig economy's potential to offer flexible and meaningful opportunities and it is crucial too ensure our freelancers receive the benefits and protections they deserve," Barbeau added.
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The company began operations in the state five years ago, with markets in Los Angeles, San Diego and the Bay Area.
Chiu’s lawsuit said that Qwick’s practices put the company in violation of Assembly Bill 5, a 2019 state law that prohibits companies from classifying workers as contractors instead of employees unless their businesses meet specific criteria. Qwik allegedly failed to meet many of those conditions, including failing to allow workers to set their own shift rates or promote themselves to other businesses using the platform.
The City Attorney’s Office also said that Qwick violated numerous city ordinances, including ones that require companies to pay health care minimums and parental leave.
The company thus gained an unfair business advantage over law-abiding businesses, the city attorney said, which constituted a violation of California’s Unfair Competition Law.
Should the court approve the settlement, the city attorney’s office would monitor Qwick through Aug. 1, 2026 to ensure the company’s compliance.
“We are sending a clear message: We will not allow this illegal business model to take root in the hospitality industry,” Chiu said.
