The Federal Trade Commission (FTC) and New York’s attorney general have taken action against Handy, a popular gig economy platform known for connecting users with cleaners and handypeople. The accusations claim that Handy has been misleading its workers about potential earnings through the platform, leading to a complex legal dispute.
On Tuesday, a formal complaint was filed in the U.S. District Court for the Southern District of New York. The FTC and New York’s attorney general allege that Handy, owned by Angi (experiencing an identity shift from Angela’s List), has been offering misleading advertisements regarding worker earnings. The claims made in these advertisements do not align with the typical income workers receive, creating a gap between perception and reality. Handy has purportedly withheld substantial sums of money from workers due to hidden fees and fines, exacerbating the issue.
While agreeing to settle, Handy has not admitted any wrongdoing. Samuel Levine, director of the FTC’s bureau of consumer protection, stated that Handy used overstated and inaccurate earnings projections to recruit workers to its platform. He further criticized the company for deducting fees from workers’ pay without clear disclosure.
The complaint outlines how Handy advertised its platform as a quick-paying opportunity but neglected to inform workers about additional fees for faster payment options. Typically, workers wait about a week for payment, unless they pay extra fees or complete additional tasks.
Furthermore, the FTC and New York’s attorney general argue that Handy’s earnings expectations were set unrealistically high. For example, in New York, New Jersey, and California, the advertised earning rates were only available to workers in the top pay tier, which requires meeting challenging qualifications. In other areas, the platform promoted earnings of up to $45 an hour for specific jobs, despite most workers earning significantly less.
Additionally, the app imposed unclear penalties on many workers, often due to system malfunctions outside their control. One such instance involved a system bug that led to job cancellation issues, resulting in thousands of workers facing $50 fines unless they complied with strict conditions like enabling GPS tracking or staying at a job site for over 30 minutes.
These financial penalties can be especially harsh for gig workers who depend heavily on platforms like Handy as their main income source. A 2022 Economic Policy Institute survey revealed that 14% of gig workers earned below the federal minimum wage, with many experiencing food insecurity or struggling to pay basic utility bills.
Acknowledging these challenges, Handy admits a significant portion of its workers depends on public assistance or resides in public housing.
As part of the proposed settlement, Handy would pay $2.95 million to refund workers adversely affected by its practices. Moreover, the company would be required to substantiate earnings claims and clarify fee avoidances for its workers.
In response, Handy expressed agreement with the settlement terms and emphasized their commitment to their clients—small businesses aiding Americans in home maintenance. While prepared to contest the accusations, Handy communicated its desire to resolve the matter swiftly to refocus efforts on serving its clientele. They maintained that the allegations lacked fairness and should not be seen as validated through this settlement.
