Arise Virtual Solutions Lawsuit

Arise Virtual Solutions, Inc., also simply known as Arise, is a company that offers customer support services through the gig economy. The firm employs a team of customer support agents who primarily work from their homes as remote workers.

They boast high-profile clients in different industries (mostly Fortune 500 companies), including travel, cable, sports, finance, and more. The whole point of having virtual customer service representatives is to reduce costs by outsourcing call-center operations. The company became particularly popular during the Covid-19 pandemic, when companies all over the US were looking for remote workers. But what started as a brilliant idea has quickly transformed into an exploitation platform for unsuspecting yet hardworking individuals.

The Florida-based company is being sued primarily for employee misclassification. Several reports have shown that Arise has consistently misclassified its agents as independent contractors, depriving them of their rights to receive employee benefits.

These agents should have been classified as employees per state and federal labor and employment laws because Arise has significant control over their employment. Keep in mind that one of the main characteristics of employee status is when the employer has control over that particular worker. On the other hand, when you are an independent contractor, you operate independently.

That was never the case with most Arise workers. While they operate remotely and as “independent contractors,” the company has significant control over them, as discussed below.

Arise dictates their workers' pay rates, supervises and manages their work, and maintains a digital surveillance system that tracks their performance to the smallest detail. Additionally, Arise's agents carry out essential functions at the core of the company's operations. In other words, the customer support agents are crucial to Arise's ability to provide customer service.

Think about it this way: Arise offers virtual customer support services. That's their main business model, meaning they wouldn't be in business without their workers, whom they classify as independent contractors. So, these are not just individuals contracted to perform a particular task and go on with their businesses; they are the nucleus of the company.

Several claims have shown that Arise employs various methods to unlawfully deprive agents of the wages they have legitimately earned. For instance, in the District of Columbia, some agents are paid hourly rates that fall well below the minimum wage.

In January 2022, ex-Attorney General Karl A. Racine announced the commencement of a wage theft lawsuit against the customer support platform.

The lawsuit raised the following allegations against Arise, some of which has been raised in many other claims against them:

• charging agents for training and certification fees;
• requiring agents to provide their own work equipment;
• mandating agents to work unpaid hours (such as when meeting with supervisors), and;
• reducing their pay when they fail to meet certain performance standards.

These requirements further reduced the already inadequate pay the company provides its agents.

In the District, the former AG's report also claimed that Arise and Comcast, one of its prominent clients, failed to pay the minimum wage to their employees. This is despite employment laws in the District requiring employers to pay no less than the minimum wage.

However, Arise and Comcast did not comply with this requirement. Instead, they paid agents subminimum wages for all hours worked, another case of worker exploitation by big companies. Even worse is that the agents' already meager pay was further reduced after accounting for unpaid time spent on training, meetings with supervisors, and other compensable work, including equipment, training, and administration fees.

While the amount is unclear, several reports have highlighted how much money Arise workers spend on their work equipment. For example, some spend between $10 and $40 monthly for landline phones. Other expenses involved include the cost of purchasing office equipment such as computers, monitors, headsets, Ethernet cords, keyboards, webcams, printers, and upgraded Wi-Fi. On average, one employee could spend up to $3,800 on equipment alone.

Unfortunately, Arise did not compensate agents for working split shifts. That was one of the key issues raised by the lawsuit filed against them in the District of Columbia.

A split shift is when an employee works two or more shifts, interrupted by an unpaid break. In many states, employment regulations stipulate that employers must pay employees an extra hour of pay at the minimum wage rate for split shifts.

In D.C., a Minimum Daily Wage regulation guarantees employees who work for at least four hours a day a minimum pay when they show up to work. The Minimum Daily Wage requires employers to pay employees for at least four hours of work, even if they are given less work for the day. Arise failed to adhere to this requirement.

The AG's report also established that Arise did not pay overtime rates of at least 1.5 times the employee's regular rate to agents who worked more than 40 hours per week. It should be noted that failure to pay overtime wages is a form of wage theft.

Lastly, the company did not provide agents with paid sick leave as required by the D.C.'s Sick and Safe Leave Act (SSLA).

It is crucial to differentiate between an independent contractor and a company employee because it determines the rights and protections available to each worker.

An independent contractor is a self-employed individual who offers services to a company or client but is not considered an employee. Independent contractors are responsible for paying their taxes and benefits and are not entitled to the same legal protections and benefits as employees. Companies typically hire them to perform specific tasks or projects, and the company they work for has less control over their work.

From the above example, pay attention to the term “control.” As mentioned earlier, Arise enjoys huge control over its workers but still classifies them as independent contractors.

On the other hand, a company employee is hired by a company and works under its direction and control. That is where Arise workers should have been classified in the first place.

Company employees are entitled to certain legal protections, such as:

• minimum wage;
• overtime pay;
• health insurance;
• paid time off;
• retirement benefits;
• workers' compensation insurance and;
• unemployment benefits.  

In employment lawsuits, the distinction between an independent contractor and a company employee is critical. This is because the laws and regulations that apply to each classification are different. For instance, minimum wage laws only apply to employees, not independent contractors. And given that Arise workers performed the role of employees rather than independent contractors, they were entitled to minimum wage.

To understand how serious the issue of employee misclassification is, let's briefly look at an employer's responsibility to their employee.

When an employer hires an employee, they are typically responsible for the following:

• withholding income, Social Security, and Medicare taxes from the employee's salary;
• paying half of the Social Security and Medicare taxes due by the employee;
• providing workers' compensation and unemployment insurance; and
• complying with other legal requirements, such as overtime, family leave, and sick leave.

Keep in mind that these requirements vary depending on federal and state laws. However, with independent contractors, the employer is only responsible for paying the contractor's invoices. As a result, some employers misclassify their workers because it is easier to hire them than employees.

Employee misclassification can result in legal and financial consequences, whether intentional or not.

Examples of these consequences include the following:

• reimbursing unpaid wages, workers' compensation, retirement benefits, and other employee benefits; or
• paying back taxes, Medicare and Social Security contributions, and other penalties for state and federal taxes.

In some cases, a federal lawsuit may even be filed against the rogue employer. This is especially true if the employer intentionally misclassified their workers to avoid the responsibilities of hiring actual employees.

Most big companies and corporations, including Arise, use different tactics to handle such cases and limit the damages. The use of an arbitration agreement is an example of such a tactic. Unfortunately, most employees do not realize that they are bound to such agreements until later when they have serious allegations against their employer.

An arbitration agreement, in this context, requires claimants to solve such issues with their employers out of court. In other words, when you are bound by an arbitration agreement, filing a lawsuit against the other party is not usually possible. Instead, you'll have to handle such a case in court.

But here's the issue; arbitration can result in lower compensation or victories than when pursuing such a case in court. So to increase your chances of obtaining a favorable outcome, you need a competent and powerful employment lawyer. That is where Morgan & Morgan comes in.

If you have a claim against Arise, having Morgan & Morgan employment attorneys by your side would be helpful. Here is why.

We are America's largest injury firm, with a solid reputation for fighting for the rights of the injured from coast to coast. So, whether you live in California, Massachusetts, Illinois, New York, New Jersey, the District of Columbia, Connecticut, Vermont, or elsewhere, all you need is a free case evaluation with us.

Morgan & Morgan also files the most employment cases in the country, a true testimony of our experience in this area of law. Speaking of experience, we have been fighting for the rights of the injured since 1988.

To date, we have worked with over 300,000 clients and helped them recover over $20 billion for different injuries. And that's not all—we have taken on some of the biggest companies in the world. As a result, we are never afraid of fighting for our client's rights, regardless of the defendant's size or status.

Morgan & Morgan also boasts powerful resources to build strong cases for the injured or those whose rights have been violated. Our team comprises over 1,000 lawyers and other professionals who work closely to obtain the best possible outcomes for our clients.

If you or someone you know works or worked for Arise, you may be able to obtain compensation for various employment violations the company has been accused of in the recent past. However, we understand that each case is different and that is why we offer a free case evaluation. So get in touch with us today to discuss your case and learn more about your options.