Dive Brief:

• Customer service company Arise Virtual Solutions has agreed to pay over $2 million to more than 250 workers following a suit that alleged it had unlawfully classified as independent contractors and failed to pay minimum wages to in a settlement the D.C. attorney general announced March 12.
• Arise, which has admitted no wrongdoing, will pay another $940,000 to the District of Columbia and will no longer conduct business in the district.
• “This settlement puts more than $2 million into the pockets of workers Arise took advantage of in a misclassification scheme — an illegal practice that is, unfortunately, all too common in the District,” Attorney General Brian Schwalb said in a prepared statement.

Dive Insight:

Arise provides at-home customer service agents to major companies looking to outsource their customer service and cut costs, including the likes of Disney, Comcast and AirBnb. It came under the ire of the district when the company allegedly classified its D.C. workers as independent contractors but treated them like full-time employees.

In doing so, the company unlawfully failed to pay its D.C. workers the minimum wage, overtime and paid sick leave, the D.C. attorney general’s office alleged.

Assistant Attorney General Sarah M. Levine, who handled the settlement for D.C., credited ProPublica’s investigation for sparking the lawsuit.

Arise charged its agents for use of its platforms and training and made workers pay for call center equipment, ProPublica’s investigation found.

Arise also failed to pay agents for time spent in mandatory training and meetings, illegally docked pay for poor performance and frequently targeted women of color for its recruiting efforts, the suit alleged.

In a statement to ProPublica, Arise said it disagreed with the district attorney general’s allegations. 

“While we disagree with the office of the Attorney General’s allegations, and their efforts to deprive business owners in the District of the economic opportunities that the Arise Platform provides, we are pleased to have resolved this matter and we will continue to move our business forward outside of the District,” the company said in a statement.

Arise’s legal troubles are far from over. Last year, the U.S. Department of Labor filed a lawsuit against the company in federal court in Florida for allegedly misclassifying more than 22,000 employees as independent contractors.