13 ms·

> From my perspective Instacart is stealing from its customers and workers by doing this. This is 100% wage theft.

by twothumbsup 8y ago

gowld 8y ago
According to what ruling? It depends on the agreement between Instacart and delivery staff.
- deleted 8y ago
  [deleted]
- function_seven 8y ago
  The Fair Labor Standards Act disallows this type of agreement for ordinarily-tipped jobs. I don't know how the contractor status of Instacart drivers affects this. They're not technically employees. But the verbiage of "Tip" in the UI is a strong signal to the customer that the money is directly credited to the driver. It should bear no relation to their fee from Instacart. This is wage theft. A horrible agreement doesn't make it right, even if it is legal.
  - pkaye 8y ago
    The Fair Labor Standards Act (FLSA) covers only employees, not independent contractors.
    - FireBeyond 8y ago
      Maybe so, but WA State Labor and Industries is not quite so "generous" to the gig economy, including their test for contractors, which is a bit more ... "rigorous" ... than some startups would like: Does the independent contractor bring more than their personal labor? Do they hire crew of their own or are they bringing other employees? Or, are they bringing heavy or costly specialized equipment? Are they an established business, working without your direction or control? Are they free from your supervision, direction or control? Is the individual’s business different and separate from your own? Is the individual’s service “outside the usual course of business,” or in other words, does the contractor do something different from what you do? Is the individual’s service being performed “outside of all of the places of business,” or in other words, does the contractor perform the service away from where you perform your services? Is the individual contractually obligated to pay costs affiliated with the location from where the work is controlled (usually its headquarters)? Does the individual have an established independent business that existed before you brought them on – OR – does the individual have a principal place of business that qualifies for an IRS business deduction? Do you have evidence to demonstrate that the individual has an established business? Does the individual have a principal place of business that qualifies for an IRS business deduction? Do you have evidence to demonstrate it? Is the individual responsible for filing a schedule of expenses with the IRS, such as would be part of a business tax return? Does the individual have all required registrations and licenses for their business? Does the individual maintain his/her own set of books and records that reflect all income and expenses of the business? This question is for construction contractors only: Is the individual a properly registered contractor? Note that this is not an "Answer 'yes' to any question to be considered a Contractor", it's a "totality" thing. (https://www.lni.wa.gov/IPUB/101-063-000.pdf https://www.lni.wa.gov/IPUB/101-063-000.pdf) "I subcontracted some work to a guy who has a contractor’s registration with L&I. Doesn’t that mean he’s not my employee?" Not necessarily. L&I auditors look at “direction or control” and other factors described on the previous pages. Because he is a construction contractor, all seven parts of RCW 51.08.181 must be met. And so on...
      - pkaye 8y ago
        All great questions but what has the state labor board not been enforcing it on Instacart up to now?
        FireBeyond 8y ago
        Because it wasn't obvious / evident / they haven't received a complaint from an affected individual in regards to this practice?
        garmaine 8y ago
        Regulations typically aren’t proactively enforced, but retroactively penalized.
    - foobiekr 8y ago
      Yet another reason this independent contractors thing is an exploitive scam.
  - Domenic_S 8y ago
    The google term you want is "tip credit" -- it is common and legal federally and in most states to deduct tips from your hourly wage. Washington state is one of the few where tip credits are not legal. This is a very common setup in other pay structures as well, such as commissioned sales where you are paid a "draw" (such as minimum wage) and you don't paid get any commission until your commissions exceed minimum wage. What's more, the tip money did go directly to the driver; Instacart just decided to pay less. It's a pretty inhumane thing to do but on the face of it I don't see how it's wage theft. Welcome to the gig economy.
    - tareqak 8y ago
      How is this allowed by law? If you have to pay back your minimum wage before you get your commission then it’s not really a minimum wage.
      - Domenic_S 8y ago
        There are lots of kinds of draw, but this kind is essentially a loan against your future commissions (or in our context, against your tips). Here's some more information about how it works legally: https://corporate.findlaw.com/human-resources/legal-considerations-when-accepting-a-draw.html https://corporate.findlaw.com/human-resources/legal-consider...
  - muzani 8y ago
    Logically, independent contractors should get paid more, not less, than full time employees, because they don't get the other benefits.
- lenticular 8y ago
  Not sure why this is being downvoted, as you absolutely are not wrong about this. They are independent contractors who entered into a contract just like a restaurant could contract with a food supplier. They aren't employees in the least as far as the law is concerned.
  - FireBeyond 8y ago
    Because Washington state is a little more rigorous than "did you enter into a contract? nope, not an employee!" than you describe.
  - nerpderp83 8y ago
    How and why are you so vehemently defending instacart when it comes to WA state law?
    - icebraining 8y ago
      Is lenticular defending Instacart? It helps no one - much less the victims - to inaccurately portray their legal situation.
    - lenticular 8y ago
      I'm not defending Instacart, I'm just pointing out legal realities. Many folks in this thread are severely mistaken about employment law. Just because something is morally wrong doesn't mean its illegal. I'm from Washington as well. I know a decent amount about employment law here.
dhimes 8y ago
Yep. They need to pay reimburse those workers with a penalty fee tacked on.
- Gibbon1 8y ago
  Same rules for should apply to wage theft as ordinary theft, more than $950 and it's a felony.
  - lenticular 8y ago
    This isn't wage theft since they are independent contractors. It's more like a company stiffing a supplier. More of a civil than criminal matter. Of course, these folks wouldn't have the resources to sue anyway, even if they weren't bound by binding arbitration.
    - aqme28 8y ago
      > More of a civil than criminal matter I think the question though is _why_ is that? If I steal $950 from someone then it's criminal, but if I refuse to pay them what I agreed then it's civil. It's an odd discrepancy IMO.
      - gbear605 8y ago
        For one, we probably don't need the police to come and arrest Instacart's CEO in this case.
        aqme28 8y ago
        /shrug In this case they're doing something (questionably) legal but terrible. There are plenty of cases out there of outright wage theft. I wouldn't have a problem with the people in charge of those decisions getting arrested.
        dingo_bat 8y ago
        Why not? If you stole $950 from a random guy on the street wouldn't you get arrested?
TomMckenny 8y ago
They better hope there's no binding arbitration clause.
- lenticular 8y ago
  The chances of there not being is approximately zero.
- dsl 8y ago
  The workers may be subject to arbitration, but state regulators (who enforce employment law) are not.
wetpaste 8y ago
I had a service industry job in texas that payed me around 2.50 an hour (iirc) and as long as I made enough in tips to cover minimum wage they didn't have to pay actual minimum wage. It's immoral as fuck to steal tips. I don't care if it's legal. If I'm a customer tipping the person a certain amount I want to make sure it's actually helping that person and not just lining the pockets of their employer, that's absurd.
- Zimahl 8y ago
  That might be legal in Texas, but in Washington it's explicitly illegal. In the state, tips are completely irrelevant to base pay, all employees must get paid at least minimum wage as base pay. Instacart is going to get fucked very quickly by the Washington AG. This is as bad as Walmart not paying employees for overtime.
  - pnathan 8y ago
    The WA AG is a bit on the antsy activist side too: this is like a great poster case for the anti-gig-worker advocates. in any case, this is really awful for the poor drivers. I had no idea.
  - jacurtis 8y ago
    Especially because Washington's Attorney General is particularly fond of jumping on cases like this, particularly worker rights. But he is also fond of keeping startups in line. So this is a double-whammy case for him.
    - nerpderp83 8y ago
      I'd love to see someone at Instacsrt jailed for wage theft. They should have to pay back "the winnings" by 3x and fire the people involved.
  - lightedman 8y ago
    Tip taking is also illegal by CA laws. Instacart is about to really get nailed.
kevin_b_er 8y ago
It will not matter. Washington state law does not apply. The sovereign state of Washington laws are superseded and invalidated by mandatory binding arbitration. The rights set out in the State of Washington's constitution do not apply, for they are superceded and ignored by mandatory binding arbitration. Any dispute will go to a monkey court instead.
- dragonwriter 8y ago
  > The sovereign state of Washington laws are superseded and invalidated by mandatory binding arbitration. No, they aren't; binding arbitration is a venue for resolving disputes about the application of laws, it doesn't supersede the laws, and manifest disregard for the law is one of the few reasons for courts setting aside a binding arbitration decision.
- sokoloff 8y ago
  Washington state law certainly does apply. The state did not sign a mandatory binding arbitration agreement. The employee/contractor may not have the right to bring suit against Instacart, but the state maintains that right. Thought experiment: could Instacart assault, kidnap, or murder a delivery driver and claim that arbitration is the only venue for redress?
  - dabockster 8y ago
    And even then, the worker does have the right to petition the court to review the clause itself. So the worker can still sue with the knowledge that it will be thrown out if the judge decides to uphold the arbitration clause.
- FireBeyond 8y ago
  Washington state law is very clear that Labor laws cannot be superceded by arbitration clauses, and that employees, including contractors, cannot waive their labor rights.
- 8bitsrule 8y ago
  This 'sovereign state' is the same state that uses a (regressive) sales tax to generate revenue, rather than an income tax. Maybe it'll grow up and be an adult state one day.
mannykannot 8y ago
And while it is not as important an issue, I, as a tipper, feel that I have been defrauded when this happens (now that I am aware that this does happen, I assume that it has probably been done with some tips I have made.) To be clear: this is not an alternative way of looking at the issue, it is an additional indictment stemming from the practice.
- TAForObvReasons 8y ago
  Switch to cash tipping. Tipping through CC or some other mechanism means at least one other party is involved and takes a cut. Cash tipping ensures the money at least is seen by the service staff.
  - dmurray 8y ago
    Statistically speaking, the main party missing out on its cut when you tip in cash is the IRS. Not really an ethical concern for most of us, but for those who do feel bad about this, you could just overpay your taxes every year by say 10% of what you estimate you tipped in cash.
    - lukev 8y ago
      It is the obligation of the tipped employee to report their tips as income and pay taxes on them. True, it's difficult to audit so sometimes they don't, but that's hardly my problem. The notion that you should overpay your own taxes to solve this is just bewildering.
    - jdavis703 8y ago
      The worker is supposed to report all cash tips. Since most of these workers probably pay little to no taxes, it really doesn’t harm the treasury, even if they fail to report.
    - kaslai 8y ago
      Recipients of cash tips must report the income to the IRS for taxation purposes. The fact that many people choose to refuse to disclose their cash tip earnings doesn't mean that I should bulk up my taxes to make up for their fraud.
deepsun 8y ago
Many many places do that. I worked in PizzaHut in NJ, and they pay you less than minimum wage initially. Then you report your earnings, and if your tips + salary / hoursworked < minimum wage, then they will pay you the difference to match minimum wage. So you have incentive to report 0.0 tips. But then our manager at PizzaHut let go everyone who reported 0.0 tips (when asked why, he said they called customers to confirm we did receive tips). And that's not only PizzaHut, that's everyone doing that, at least in NJ.
- aqme28 8y ago
  > when asked why, he said they called customers to confirm we did receive tips That would make some sense even. If a server doesn't get tips, that could be a sign that they are a bad server.
  - sib 8y ago
    Also, that they were lying to him. (Not agreeing with wage / tip theft, of course, but, as an employer, you need to be able to believe your employees.)
    - zAy0LfpBZLC8mAC 8y ago
      There is no moral obligation to say the truth when it is inappropriate to ask the question in the first place.
- javagram 8y ago
  Many states have what’s known as a tipped minimum wage which is different from the minimum wage. The tipped minimum is usually something like $2 vs the $7 minimum wage (these numbers are probably off now that so many places have raised the minimum wage to $10 or $12). Since in this instacart case they ended up paying out $.80 an hour it’s below even tipped minimum wage standards, although I assume there’s some dodge about claiming the employees are contractors to get around paying wages.
  - 8y ago
drewmol 8y ago
It may be, Federal Law is more specific on tipping, allocation, role definitions in the restaurant industry, but not well expanded to define other industries. State law can further regulate . In spirit, a tip is an independant transaction between 2 parties and should be accounted as one. You must pay min rate for position (2.xx+?) and employee must make above fed/state min wage with tips once accounted, you must increase your compensation to make up a defecit between wage + tips vs min wage. You cannot pay below a certain wage regardless of tip amount, or maybe that's only in specified roles. I'm not sure.

> From my perspective Instacart is stealing from its customers and workers by doing this. This is 100% wage theft.

gowld 8y ago

According to what ruling? It depends on the agreement between Instacart and delivery staff.

deleted 8y ago
[deleted]
function_seven 8y ago
The Fair Labor Standards Act disallows this type of agreement for ordinarily-tipped jobs. I don't know how the contractor status of Instacart drivers affects this. They're not technically employees. But the verbiage of "Tip" in the UI is a strong signal to the customer that the money is directly credited to the driver. It should bear no relation to their fee from Instacart. This is wage theft. A horrible agreement doesn't make it right, even if it is legal.
- pkaye 8y ago
  The Fair Labor Standards Act (FLSA) covers only employees, not independent contractors.
  - FireBeyond 8y ago
    Maybe so, but WA State Labor and Industries is not quite so "generous" to the gig economy, including their test for contractors, which is a bit more ... "rigorous" ... than some startups would like: Does the independent contractor bring more than their personal labor? Do they hire crew of their own or are they bringing other employees? Or, are they bringing heavy or costly specialized equipment? Are they an established business, working without your direction or control? Are they free from your supervision, direction or control? Is the individual’s business different and separate from your own? Is the individual’s service “outside the usual course of business,” or in other words, does the contractor do something different from what you do? Is the individual’s service being performed “outside of all of the places of business,” or in other words, does the contractor perform the service away from where you perform your services? Is the individual contractually obligated to pay costs affiliated with the location from where the work is controlled (usually its headquarters)? Does the individual have an established independent business that existed before you brought them on – OR – does the individual have a principal place of business that qualifies for an IRS business deduction? Do you have evidence to demonstrate that the individual has an established business? Does the individual have a principal place of business that qualifies for an IRS business deduction? Do you have evidence to demonstrate it? Is the individual responsible for filing a schedule of expenses with the IRS, such as would be part of a business tax return? Does the individual have all required registrations and licenses for their business? Does the individual maintain his/her own set of books and records that reflect all income and expenses of the business? This question is for construction contractors only: Is the individual a properly registered contractor? Note that this is not an "Answer 'yes' to any question to be considered a Contractor", it's a "totality" thing. (https://www.lni.wa.gov/IPUB/101-063-000.pdf https://www.lni.wa.gov/IPUB/101-063-000.pdf) "I subcontracted some work to a guy who has a contractor’s registration with L&I. Doesn’t that mean he’s not my employee?" Not necessarily. L&I auditors look at “direction or control” and other factors described on the previous pages. Because he is a construction contractor, all seven parts of RCW 51.08.181 must be met. And so on...
    - pkaye 8y ago
      All great questions but what has the state labor board not been enforcing it on Instacart up to now?
      - FireBeyond 8y ago
        Because it wasn't obvious / evident / they haven't received a complaint from an affected individual in regards to this practice?
      - garmaine 8y ago
        Regulations typically aren’t proactively enforced, but retroactively penalized.
  - foobiekr 8y ago
    Yet another reason this independent contractors thing is an exploitive scam.
- Domenic_S 8y ago
  The google term you want is "tip credit" -- it is common and legal federally and in most states to deduct tips from your hourly wage. Washington state is one of the few where tip credits are not legal. This is a very common setup in other pay structures as well, such as commissioned sales where you are paid a "draw" (such as minimum wage) and you don't paid get any commission until your commissions exceed minimum wage. What's more, the tip money did go directly to the driver; Instacart just decided to pay less. It's a pretty inhumane thing to do but on the face of it I don't see how it's wage theft. Welcome to the gig economy.
  - tareqak 8y ago
    How is this allowed by law? If you have to pay back your minimum wage before you get your commission then it’s not really a minimum wage.
    - Domenic_S 8y ago
      There are lots of kinds of draw, but this kind is essentially a loan against your future commissions (or in our context, against your tips). Here's some more information about how it works legally: https://corporate.findlaw.com/human-resources/legal-considerations-when-accepting-a-draw.html https://corporate.findlaw.com/human-resources/legal-consider...
- muzani 8y ago
  Logically, independent contractors should get paid more, not less, than full time employees, because they don't get the other benefits.
lenticular 8y ago
Not sure why this is being downvoted, as you absolutely are not wrong about this. They are independent contractors who entered into a contract just like a restaurant could contract with a food supplier. They aren't employees in the least as far as the law is concerned.
- FireBeyond 8y ago
  Because Washington state is a little more rigorous than "did you enter into a contract? nope, not an employee!" than you describe.
- nerpderp83 8y ago
  How and why are you so vehemently defending instacart when it comes to WA state law?
  - icebraining 8y ago
    Is lenticular defending Instacart? It helps no one - much less the victims - to inaccurately portray their legal situation.
  - lenticular 8y ago
    I'm not defending Instacart, I'm just pointing out legal realities. Many folks in this thread are severely mistaken about employment law. Just because something is morally wrong doesn't mean its illegal. I'm from Washington as well. I know a decent amount about employment law here.

dhimes 8y ago

Yep. They need to pay reimburse those workers with a penalty fee tacked on.

Gibbon1 8y ago
Same rules for should apply to wage theft as ordinary theft, more than $950 and it's a felony.
- lenticular 8y ago
  This isn't wage theft since they are independent contractors. It's more like a company stiffing a supplier. More of a civil than criminal matter. Of course, these folks wouldn't have the resources to sue anyway, even if they weren't bound by binding arbitration.
  - aqme28 8y ago
    > More of a civil than criminal matter I think the question though is _why_ is that? If I steal $950 from someone then it's criminal, but if I refuse to pay them what I agreed then it's civil. It's an odd discrepancy IMO.
    - gbear605 8y ago
      For one, we probably don't need the police to come and arrest Instacart's CEO in this case.
      - aqme28 8y ago
        /shrug In this case they're doing something (questionably) legal but terrible. There are plenty of cases out there of outright wage theft. I wouldn't have a problem with the people in charge of those decisions getting arrested.
      - dingo_bat 8y ago
        Why not? If you stole $950 from a random guy on the street wouldn't you get arrested?

TomMckenny 8y ago

They better hope there's no binding arbitration clause.

lenticular 8y ago
The chances of there not being is approximately zero.
dsl 8y ago
The workers may be subject to arbitration, but state regulators (who enforce employment law) are not.

wetpaste 8y ago

I had a service industry job in texas that payed me around 2.50 an hour (iirc) and as long as I made enough in tips to cover minimum wage they didn't have to pay actual minimum wage. It's immoral as fuck to steal tips. I don't care if it's legal. If I'm a customer tipping the person a certain amount I want to make sure it's actually helping that person and not just lining the pockets of their employer, that's absurd.

Zimahl 8y ago
That might be legal in Texas, but in Washington it's explicitly illegal. In the state, tips are completely irrelevant to base pay, all employees must get paid at least minimum wage as base pay. Instacart is going to get fucked very quickly by the Washington AG. This is as bad as Walmart not paying employees for overtime.
- pnathan 8y ago
  The WA AG is a bit on the antsy activist side too: this is like a great poster case for the anti-gig-worker advocates. in any case, this is really awful for the poor drivers. I had no idea.
- jacurtis 8y ago
  Especially because Washington's Attorney General is particularly fond of jumping on cases like this, particularly worker rights. But he is also fond of keeping startups in line. So this is a double-whammy case for him.
  - nerpderp83 8y ago
    I'd love to see someone at Instacsrt jailed for wage theft. They should have to pay back "the winnings" by 3x and fire the people involved.
- lightedman 8y ago
  Tip taking is also illegal by CA laws. Instacart is about to really get nailed.

kevin_b_er 8y ago

It will not matter. Washington state law does not apply. The sovereign state of Washington laws are superseded and invalidated by mandatory binding arbitration. The rights set out in the State of Washington's constitution do not apply, for they are superceded and ignored by mandatory binding arbitration. Any dispute will go to a monkey court instead.

dragonwriter 8y ago
> The sovereign state of Washington laws are superseded and invalidated by mandatory binding arbitration. No, they aren't; binding arbitration is a venue for resolving disputes about the application of laws, it doesn't supersede the laws, and manifest disregard for the law is one of the few reasons for courts setting aside a binding arbitration decision.
sokoloff 8y ago
Washington state law certainly does apply. The state did not sign a mandatory binding arbitration agreement. The employee/contractor may not have the right to bring suit against Instacart, but the state maintains that right. Thought experiment: could Instacart assault, kidnap, or murder a delivery driver and claim that arbitration is the only venue for redress?
- dabockster 8y ago
  And even then, the worker does have the right to petition the court to review the clause itself. So the worker can still sue with the knowledge that it will be thrown out if the judge decides to uphold the arbitration clause.
FireBeyond 8y ago
Washington state law is very clear that Labor laws cannot be superceded by arbitration clauses, and that employees, including contractors, cannot waive their labor rights.
8bitsrule 8y ago
This 'sovereign state' is the same state that uses a (regressive) sales tax to generate revenue, rather than an income tax. Maybe it'll grow up and be an adult state one day.

mannykannot 8y ago

And while it is not as important an issue, I, as a tipper, feel that I have been defrauded when this happens (now that I am aware that this does happen, I assume that it has probably been done with some tips I have made.) To be clear: this is not an alternative way of looking at the issue, it is an additional indictment stemming from the practice.

TAForObvReasons 8y ago
Switch to cash tipping. Tipping through CC or some other mechanism means at least one other party is involved and takes a cut. Cash tipping ensures the money at least is seen by the service staff.
- dmurray 8y ago
  Statistically speaking, the main party missing out on its cut when you tip in cash is the IRS. Not really an ethical concern for most of us, but for those who do feel bad about this, you could just overpay your taxes every year by say 10% of what you estimate you tipped in cash.
  - lukev 8y ago
    It is the obligation of the tipped employee to report their tips as income and pay taxes on them. True, it's difficult to audit so sometimes they don't, but that's hardly my problem. The notion that you should overpay your own taxes to solve this is just bewildering.
  - jdavis703 8y ago
    The worker is supposed to report all cash tips. Since most of these workers probably pay little to no taxes, it really doesn’t harm the treasury, even if they fail to report.
  - kaslai 8y ago
    Recipients of cash tips must report the income to the IRS for taxation purposes. The fact that many people choose to refuse to disclose their cash tip earnings doesn't mean that I should bulk up my taxes to make up for their fraud.

deepsun 8y ago

Many many places do that. I worked in PizzaHut in NJ, and they pay you less than minimum wage initially. Then you report your earnings, and if your tips + salary / hoursworked < minimum wage, then they will pay you the difference to match minimum wage. So you have incentive to report 0.0 tips. But then our manager at PizzaHut let go everyone who reported 0.0 tips (when asked why, he said they called customers to confirm we did receive tips). And that's not only PizzaHut, that's everyone doing that, at least in NJ.

aqme28 8y ago
> when asked why, he said they called customers to confirm we did receive tips That would make some sense even. If a server doesn't get tips, that could be a sign that they are a bad server.
- sib 8y ago
  Also, that they were lying to him. (Not agreeing with wage / tip theft, of course, but, as an employer, you need to be able to believe your employees.)
  - zAy0LfpBZLC8mAC 8y ago
    There is no moral obligation to say the truth when it is inappropriate to ask the question in the first place.
javagram 8y ago
Many states have what’s known as a tipped minimum wage which is different from the minimum wage. The tipped minimum is usually something like $2 vs the $7 minimum wage (these numbers are probably off now that so many places have raised the minimum wage to $10 or $12). Since in this instacart case they ended up paying out $.80 an hour it’s below even tipped minimum wage standards, although I assume there’s some dodge about claiming the employees are contractors to get around paying wages.
- 8y ago

drewmol 8y ago

It may be, Federal Law is more specific on tipping, allocation, role definitions in the restaurant industry, but not well expanded to define other industries. State law can further regulate . In spirit, a tip is an independant transaction between 2 parties and should be accounted as one. You must pay min rate for position (2.xx+?) and employee must make above fed/state min wage with tips once accounted, you must increase your compensation to make up a defecit between wage + tips vs min wage. You cannot pay below a certain wage regardless of tip amount, or maybe that's only in specified roles. I'm not sure.