Arise Virtual Solutions has settled to pay over $2 million to more than 250 workers after being accused of improperly classifying them as independent contractors and failing to pay minimum wages. This settlement was announced by the D.C. attorney general on March 12. Without admitting any wrongdoing, Arise will also pay $940,000 to the District of Columbia and will cease its operations in the district.
The attorney general, Brian Schwalb, stated that this settlement addresses the issue of misclassification, a practice he described as too prevalent in the District. Arise, known for providing remote customer service for major corporations, faced criticism for its employment practices, particularly in Washington D.C., where it was alleged to have denied workers minimum wage, overtime, and paid sick leave by misclassifying them as contractors.
The case was influenced by a ProPublica investigation, which revealed that Arise charged its agents for using its platform and for training, as well as making them pay for their own call center equipment. Additionally, it was found that Arise did not compensate agents for mandatory training and meetings, deducted pay for subpar performance, and predominantly recruited women of color.
Arise contested the allegations, asserting that the attorney general’s actions unfairly impacted local business owners who benefited from Arise’s platform. The company expressed satisfaction with the resolution of the case but plans to redirect its business away from the District.
This settlement with the D.C. attorney general is part of broader legal challenges Arise faces, including a lawsuit by the U.S. Department of Labor, which alleges that the company misclassified over 22,000 employees as independent contractors.
