The Federal Trade Commission (FTC) and New York’s attorney general have accused the gig work app Handy of making deceptive claims about worker earnings and failing to clearly disclose fees. The complaint was filed on Tuesday in the U.S. District Court for the Southern District of New York. According to the complaint, Handy advertised earnings that “don’t reflect the reality for the overwhelming majority of workers on the platform.” The FTC and the NY attorney general also claimed that Handy’s undisclosed fees and fines deducted from workers’ wages caused significant financial harm.
“[Handy] relied on inflated and false earnings claims to lure workers onto its platform,” Samuel Levine, director of the FTC’s bureau of consumer protection, said in a statement. “It then deducted inadequately disclosed fines and fees from their wages.”
The complaint alleges that Handy promoted its platform as a quick way to get paid for jobs, but omitted that workers had to pay a fee, and sometimes complete another job, to unlock the fastest payouts. Typically, it takes about a week to get paid for a Handy job.
Furthermore, ads in states like New York, New Jersey, and California touted pay rates only accessible to workers in its highest pay tier, which required meeting difficult criteria. In other markets, Handy claimed workers could earn up to $45 an hour, although over 90% of workers earned less.
Disputed worker earnings and fees
Moreover, the FTC and NY attorney general said Handy charged many workers opaque fines, including penalties incurred through no fault of their own. For instance, a bug in Handy’s system led to improperly canceled jobs, causing thousands of workers to be fined $50. Workers could only avoid the fine by granting GPS permission to Handy’s app and waiting over 30 minutes at a job site.
These fees are particularly harsh for gig workers who rely on Handy as a primary income source. A 2022 report by the nonprofit Economic Policy Institute found that 14% of gig workers earned less than the federal minimum wage, and many struggled to afford basic necessities. Handy has agreed to settle — without admitting any fault — and will pay $2.95 million to refund workers harmed by its practices.
Handy must also substantiate its earnings claims and clearly explain how workers can avoid fees. A spokesperson for Handy said, “Though we were prepared to litigate, we chose to enter into an agreement with these parties to put this matter to rest and get back to putting our 100% focus on supporting our customers: the small businesses who help Americans care for and maintain their homes. None of the agencies’ allegations were fair, and this settlement should in no way be construed as a validation of their allegations.”
