A SAN FRANCISCO-BASED company that was accused of misclassifying its delivery drivers as independent contractors and failing to provide workers’ compensation insurance agreed to settle the allegations for $4.5 million, according to the San Francisco City Attorney’s Office. 

The company, WorkWhile, continued to dispute the allegations after the settlement was announced Wednesday but said in a blog post by its chief operating officer, Simon Khalaf, the agreement would allow it to move past the legal fight that began in 2024. 

The company, which is owned by Workforce as a Service Inc., uses an app to match employers with temporary workers in several industries.  

The sum includes $4.1 million in restitution for delivery drivers that were hired through the company before Sept. 6, 2025. Another $400,000 in civil penalties will be paid to the San Francisco City Attorney’s Office, according to City Attorney David Chiu. 

“As a result of this agreement, thousands of California drivers will have their stolen wages returned to them,” Chiu said in a statement. “We are proud that this builds on our previous wins for workers and further levels the playing field for law-abiding competitors in the staffing industry.” 

The company also paid $1 million in restitution to non-delivery drivers in a separate settlement with the City Attorney’s Office in 2024 and agreed to categorize all its non-driver workers as regular employees and provide legally required benefits. 

The City Attorney’s Office alleged that by misclassifying its employees as independent contractors, WorkWhile was depriving them of a range of benefits, including paid breaks, overtime, sick pay, and family leave, along with protections against retaliation and other legal rights. 

Khalaf said in his message on the company’s website that the company “strongly” disagreed with the allegations. 

The company maintained that Proposition 22 allowed it to classify drivers as independent contractors, which are often referred to as gig workers. 

Prop. 22 allowed app-based companies like Uber and Lyft to categorize their drivers as independent contractors and avoid paying certain benefits required by state labor laws. It also enacted certain minimum shift payments and health insurance contributions. 

The proposition was passed by voters in 2020 and was declared unconstitutional, before that decision was overturned. After an appeal to the California Supreme Court, the proposition was declared legal and upheld in 2024. 

“WorkWhile will continue to defend the voter-approved framework set out in Proposition 22 and drivers’ right to flexibility and independence. At the same time, resolving claims tied to prior periods allows us to deliver immediate benefits to workers and move forward without unnecessary distraction,” Khalaf said. 

The City Attorney’s Office said it would continue the litigation seeking compensation for drivers who worked on or after Sept. 6, 2025.