ShiftPixy, Inc. (“ShiftPixy® or the “Company”) a disruptive Next Gen GIG Economy provider of unique insurance products, regulatory compliance services, proprietary human administration tools and variable labor force provider, that plans to enable unemployed, under-employed or part-time and/or full-time individuals to apply for variable shift work from businesses in their local market, today announced that, it has created a new hybrid type worker classification status, designed to avoid the pitfalls inherent in trying to classify shift workers as independent contractors in the traditional GIG Economy model… pitfalls which can lead to crippling litigation.
Just recently, a case was settled with GIG Economy giant Uber for up to $100 million over alleged worker misclassification.
It is no secret that perhaps the majority of the major players in the GIG Economy (Uber, Lyft, Instacart, Postmates, Etc…) have been sued or threatened with litigation… or are rightfully worried about the increasing possibility of litigation that is inherent in the traditional employee as independent contractor classification in the GIG model. And many fear that loss of the gig workforce structure, either by a wave of class-action lawsuits, intervention by regulators, or through the collective action of disgruntled workers, and the gig economy as it now exists may be in serious jeopardy.
Politicians are considering new legislation or regulations and savvy litigation attorneys are pursuing (and winning) judgments that could put many traditional model GIG Economy companies out of business.
And the headlines echo with dire forecasts for the traditional GIG Economy:
- The Gig Economy Won’t Last Because It’s Being Sued To Death. (Source: Fastcompany.com)
- Uber’s business model under fire. (Source: The Hill.com)
- Uber and the gig economy’s existential litigation threat. (Source: Reuters)
- Grubhub delivery drivers sue over contractor status. (Source: Chicago Tribune)
- Why the Next Uber Wannabe Is Already Dead
- The most valuable startups in America rely on independent contracts. Antiquated labor laws say they may be employees. The on-demand economy hangs in the balance. (Source: Inc.com)
- Good riddance, gig economy: Uber, Ayn Rand and the awesome collapse of Silicon Valley’s dream of destroying your job. (Source: Salon.com)
Whether a company wins or loses a lawsuit… it still has burdened the company with lost time and revenues… not to mention the legal fees and significant size of potential damage awards.
Why all the litigation and talk of new legislation?
It’s because the basic framework of the traditional GIG Economy model is flawed.
These GIG Economy companies regularly classify the people working for them as “independent contractors” rather than “employees” for jobs (gigs). The companies can pay much less for services and in regulatory requirements if their workers are classified as independent contractors. Under state and federal employment laws, workers classified as employees are much more expensive for these companies.
So the common thread of the problem in the lawsuits is that although a company may internally classify workers as independent contractors, under the same federal and state laws mentioned above… they are, in reality, employees… and THAT is the source of the many lawsuits.
“…Where platforms get into legally dubious territory is when they try to claim the advantages of both systems at the same time.” (The Gig Economy Won’t Last Because It’s Being Sued To Death.)
ShiftPixy’s evolution of the classic GIG model totally eliminates this key weakness in the standard model of treating workers as independent contractors. ShiftPixy’s innovative solutionis that they treat their workers as full-time employees but they remain as if they were still independent contractors toShiftPixy’s clients.
ShiftPixy has embraced the next Gen structure for the GIG economy by making their workers (ShiftPixy calls them “Shifters”) employees of ShiftPixy and lending them out to third party employers in need of additional workers.
The employers get the benefit of having a workforce without the compliance and regulatory burdens that normally accompany their hiring of a regular workforce, particularly ones that exist in industries with many part-time/shift workers such as the restaurant and hospitality industries, ShiftPixy’s initial target market. ShiftPixy and NOT the operating business is the entity that employs these Shifters and handles ACA and other administrative and regulatory compliance matters that accompany the hiring of employees. ShiftPixy totally removes that burden from its operating business clients.
Scott W. Absher, CEO of ShiftPixy said: “The ShiftPixy solution allows employers to avoid mandated regulatory costs and related burdens… it saves them both time and money… which is designed to give them a competitive edge. It also gives the misclassified independent contractor workers the opportunity to receive “full time” wages and healthcare coverage… to be treated as employees… because they ARE employees… they are ShiftPixy employees! The ShiftPixy Next Gen model is a “win-win” for the GIG Economy companies and workers alike. We believe the natural evolution from the classic model of GIG workers being problematically classified as independent contractors, is our best of both worlds model… They are our employees AND also remain working as if they were still independent contractors to ShiftPixy clients.
ShiftPixy was formed to take advantage of weaknesses in compulsory insurance markets and new compliance requirements for U.S. businesses where statutory requirements for business owners collide with extremely limited access to the required insurance coverage, particularly health care insurance coverage, and related regulatory compliance issues.
ShiftPixy has developed proprietary technology and client engagement processes that enable the Companycreate high value on both the employer and the employee sides of the U.S. shift work chasm.
When launched in September, the ShiftPixy mobile app will allow available and qualified shift workers to connect with immediately available shifts from participating ShiftPixy Provider Clients through a simple mobile application. Shift workers or “Shifters” can find shift opportunities within their skill set and geographic range and pick up available shifts when they need the work. ShiftPixy processes the entire workflow on the provider side from offering open shifts, approving a Shifter based on their rich profile, to processing all of the payroll, insurance and regulatory demands for each shift hour worked.
For more information on ShiftPixy, please visit the Company’s website at http://www.ShiftPixy.com.
ShiftPixy has filed an Offering Circular for the offering of its securities on Form 1-A with the Securities and Exchange Commission but the Offering Circular has not yet become qualified. You may obtain a copy of the most recent version of the Preliminary Offering Circular with the following link:https://www.sec.gov/Archives/edgar/data/1675634/000147793216010647/shiftpixy_1a.htm
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